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Data shows consumer credit grew ‘much faster’ than predicted in November
Total consumer credit rose 7.1 percent at a seasonally adjusted, annualized rate in November and is up 7.9 percent compared to a year ago. Revolving credit – primarily credit cards – rose 16.9 percent and is up 14.9 percent compared to November 2021. Non-revolving credit – primarily auto loans and education loans – rose 3.9 percent during the month and is up 5.8 percent from a year ago.
“Consumer credit balances grew by $28 billion in November, much faster than experts predicted,” said NAFCU Chief Economist and Vice President of Research Curt Long in the latest Macro Data Flash report. “Revolving debt grew at an accelerated pace of 16.9 percent as households conducted holiday shopping.
“Although consumer sentiment remains low, workers are confident in their job situations and willing to spend and absorb more debt. Average credit scores for loan originations rose in recent years but are beginning to drift back to pre-COVID levels,” added Long.
Total consumer credit for credit unions rose 0.3 percent in November, compared to a 1.7 percent gain for banks and 0.4 percent increase for financial companies. From a year prior, total consumer credit at credit unions rose 17.5 percent, while banks experienced a 11.2 percent gain and financial companies grew 0.2 percent.
Over the past 12 months, credit unions’ share of the market rose 1.1 percentage points to 13.1 percent. Banks’ share rose 1.4 percentage points to 42.2 percent, and financial companies' share fell 0.9 percentage points to 12.2 percent.
“NAFCU expects consumer credit to continue expanding in the first half of 2023, but growth is likely to slow due to tighter credit provision,” concluded Long.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.