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Consumer credit rises $7.2B in May
Total consumer credit grew 1.8 percent in May at a seasonally-adjusted, annualized rate and is up 12.9 percent compared to a year ago. NAFCU Chief Economist and Vice President of Research Curt Long noted the $7.2 billion increase is “the smallest increase in the last 18 months.” In addition, while revolving credit – primarily credit cards – rose 8.2 percent, it decelerated from 13.8 percent growth in April. Non-revolving credit – primarily auto and education loans – fell 0.4 percent in May and is up 4.1 percent from a year ago.
“In terms of lenders, the decline in non-revolving loans was heavily concentrated in the federal government, which mostly reflects student loans,” Long added in the latest Macro Data Flash report. “The slowing of debt accumulation is a welcome sign as it forestalls concerns over household debt levels.”
Total consumer credit for credit unions grew 0.1 percent in May. Banks experienced 1 percent growth, and finance companies saw a gain of 0.6 percent. From a year prior, total consumer credit at credit unions rose 13.5 percent, while banks experienced an 8.6 percent gain and financial companies grew 2 percent.
Over the past 12 months, credit unions’ share of the market rose 0.9 percent to 13.5 percent. Banks’ share rose 0.9 percent, and finance companies’ share fell 0.5 percent.
“Wage growth remains solid and should accommodate modest growth in consumer debt over the rest of 2023. NAFCU will continue to keep our members informed on economic changes as new data becomes available,” concluded Long.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.