ARLINGTON, Va.—Total consumer credit grew 4.3% in June at a seasonally-adjusted, annualized rate and is up 5.7% compared to a year ago, NAFCU reported, citing Federal Reserve data.
In addition, while revolving credit – primarily credit cards – fell 0.6%, it remains 11.2% higher than June 2022. Non-revolving credit – primarily auto and education loans – rose 6% in June and is up 4% from a year ago, the Fed data show.
“Consumer credit rose by $17.8 billion in June, outpacing consensus projections of a $13 billion print,” said NAFCU Economist Noah Yosif. “This growth was driven by an increase in nonrevolving credit supporting a surge in auto sales, while offset by a modest contraction in revolving credit due to reduced credit card spending. The decline in credit card spending suggests consumption could be softening at a faster pace than expected due to higher interest rates as well as tightening economic conditions.”
The Fed data further reveal total consumer credit for credit unions grew 0.8% in June. Banks experienced 0.6% growth, and finance companies saw a gain of 1.7%. From a year prior, total consumer credit at credit unions rose 12%, while banks experienced a 7.3% gain and financial companies grew 3.7%, Yosif noted.
CU Share rises
Over the past 12 months, credit unions’ share of the market rose 0.8% to 13.2%. Banks’ share rose 0.5%, and finance companies’ share fell 0.3%.
“Incoming economic data over the next month should confirm whether consumption is falling at a healthy or hasty rate, which will be essential for the Federal Reserve as it identifies next steps for monetary policy,” Yosif concluded.
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