Sept. 11, 2012 – Demand for consumer credit cooled in July, but credit unions managed to outpace the overall market by 13.1 percent on a non-seasonally adjusted, annualized basis, according to Federal Reserve data.
Consumer credit, a measurement that does not include real estate loans, rose $3.3 billion for the entire marketplace in July on a non-seasonally adjusted basis. That represented an overall 1.5 percent annualized increase, well short of the 14.6 percent annualized gain for credit unions, noted NAFCU Staff Economist Curt Long.
Meanwhile, the seasonally adjusted numbers came in much weaker than expected, Long said. The Fed reported that consumer credit for the overall financial market fell 1.5 percent in July to $2.71 trillion on a seasonally adjusted, annualized basis. “It was the first seasonally adjusted monthly decline in nearly a year,” Long said, “and possibly a sign that consumers financed their spending by cutting savings rather than increasing credit card balances.”
At credit unions, total consumer lending increased $2.8 billion from $230.3 billion to $233.1 billion on a non-seasonally adjusted basis.
Non-revolving credit union consumer lending grew by $2.7 billion to $195.7 billion, while revolving credit remained at $37.4 billion. At the same time, credit unions’ share of total consumer installment credit increased from 8.65 percent to 8.75 percent.
Looking ahead, NAFCU believes consumer credit will likely continue to expand at a below-potential pace “as long as consumers feel less confident about their spending due to a weak labor market and a sluggish economy,” Long said.
For more, see NAFCU’s Macro Data Flash (login required).