WASHINGTON—Total consumer credit rose 5% in December, after a monthly increase of 6.8% in November and a 7.9% increase in October (all seasonally adjusted
annual rates).
NAFCU Chief Economist and Vice President of Research Curt Long noted that while consumer credit remains steady, the evolving labor market could impact these trends in the coming months.
"Consumer credit showed improvement over the second half of 2018 and finished the year on a solid note," said Long in a NAFCU Macro Data Flash report. "Most of that growth has been in the non-revolving segment, as student loan debt continues to accrue and auto loan growth held steady despite rising interest rates.
"However, the revolving segment slowed substantially over the course of the year and ended 2018 up just 2% versus a year ago,” continued Long. “A recent Fed survey of bank loan officers indicated less optimism for loan demand in 2019, and expectations that loan performance would decline, as well. Overall, the outlook for consumer credit has dimmed and will depend heavily on a strong labor market to stay afloat.
CUs Vs. Banks
Total consumer credit for credit unions increased 0.6% in December from the previous month, compared to a 1.4% increase for banks and a 0.2% decrease for financial companies. From a year prior, total consumer credit at credit unions rose 13.3%, while banks saw a 3.9% increase and financial companies saw a 1.6% decline.
Credit unions' portfolio of consumer credit was up 13.3% from a year earlier. Credit unions now own 11.8% of the market, up from 10.9% a year ago. Meanwhile, financial companies' market share fell from 14.1% to 13.3% over that period, while banks' share fell from 42.1% to 41.8%, Long said.