Consumer Credit Increased in July but Less than Expected
by:Sandy Batten
|in:Economy in Brief
Summary
- Nonrevolving credit edged up $0.8 billion with a decline in bank lending.
- Revolving credit rebounded, rising $9.6 billion after a $0.9 billion decline in June.
Consumer credit increased $10.4 billion (+4.9% y/y) in July after a downwardly revised $14.0 billion gain in June (previously +$17.8 billion). A $15.5 billion rise in June had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income edged up to 25.0% in July from a downwardly revised 24.9% in June.
Nonrevolving credit balances, which reflect secured and unsecured credit for big-ticket items, such as autos, mobile homes, trailers, durable goods and vacations, rose only $0.8 billion (+3.0% y/y) in July following a downwardly revised $14.9 billion increase in June (previously $18.5 billion). Bank borrowing slipped 0.3% y/y in July while finance company loans rose 4.8% y/y. Growth in credit union loans slowed to 9.9% y/y while Federal government loan growth slowed slightly to 2.2% y/y.
Revolving credit advanced $9.6 billion (10.8% y/y) in July more than reversing a downwardly revised $0.9 billion decline in June (previously -$0.6 billion). The growth of credit card balances slowed to 11.5% y/y while revolving loans at finance companies fell 5.8% y/y. Credit union borrowing gained 14.9% y/y.
Student loan borrowing grew 1.2% y/y during Q2’23 while the value of motor vehicle loans increased 6.1% y/y.
The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s USECON database. The Action Economics forecast figures are contained in the AS1REPA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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