ARLINGTON, Va.—Total consumer credit growth regained some momentum in July, rising 5.1%. NAFCU Chief Economist and Vice President of Research Curt Long said both consumer credit segments contributed to the growth.
"The non-revolving segment, which reported the largest increase since last November, accounted for most of the gains," Long said in a NAFCU Macro Data Flash report. "The revolving credit segment also picked up following a decline in June."
Non-revolving credit, which is mostly motor vehicle and education loans, rose 6.4%, while revolving credit, which is primarily credit cards, increased 1.5%.
Total consumer credit saw a monthly increase of 2.6% in June and a 6.8% increase in May (all seasonally adjusted annual rates).
The Overall Outlook
"Overall, the outlook for consumer credit remains stable in light of a strong labor market and elevated consumer confidence. However, the pace of growth is unlikely to increase due to rising interest rates," Long added.
Total consumer credit for credit unions increased 1.6% in July, compared to a 0.3% increase for banks and a 0.2% increase for financial companies.
Credit unions' share of the total consumer credit market rose to 11.6% in July, while banks had 41.4% and financial companies held 13.7% of the market, Long said.