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Consumer credit grows at strongest pace in years
Total consumer credit rose 10.6 percent, at a seasonally-adjusted, annualized rate, in June and is up 4.2 percent versus a year ago. Revolving credit, which is primarily credit cards, rose 22 percent during the month and is down 0.2 percent compared to June 2020.
Non-revolving credit – primarily auto and education loans – rose 7.2 percent and is up 5.5 percent over the year.
"On a seasonally-adjusted basis, consumer credit grew at the strongest rate in years once again," said Curt Long, NAFCU’s Chief Economist and Vice President of Research, in a new Macro Data Flash report. "Revolving credit grew at its fastest pace in recent history and twice as fast as the previous month.
"Trends in revolving debt can be difficult to parse; growth may reflect increased spending as consumer confidence is restored, but it may also reflect emergency spending by households still suffering through job loss and nearing the end of enhanced unemployment benefits," added Long. "Nonrevolving credit growth slowed in June, mostly as a result of lower vehicle sales."
Total consumer credit for credit unions rose 0.4 percent over the month; however, total consumer credit for credit unions rose 4.2 percent compared to a year prior. Total consumer credit at banks grew 3.7 percent over the year, and financial companies saw a 6.9 percent rise.
Credit unions' share of the market remain unchanged at 12.2 percent. Meanwhile, banks' share rose by 0.4 percent to 39.9 percent and financial companies' share fell by 0.1 percent to 13.4 percent.
"NAFCU expects strong gains in consumer credit through the rest of the year, particularly in revolving credit as the job market improves and spending patterns are restored," Long concluded.
For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports