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Consumer credit grew at strongest pace since December 2014 in May
Total consumer credit rose 10 percent, at a seasonally-adjusted, annualized rate, in May and is up 3.8 percent versus a year ago. Revolving credit, which is primarily credit cards, rose 11.4 percent during the month and is down 2.2 percent compared to April 2020.
Non-revolving credit – primarily auto and education loans – rose 9.5 percent and is up 5.6 percent over the year.
"The shortage in semiconductors to build new vehicles could slow down nonrevolving credit in the coming months, but that will resolve itself as supply stabilizes," said Curt Long, NAFCU's chief economist and vice president of research, in a new Macro Data Flash report. "Where consumer confidence and the labor market are improving, consumer credit is likely to follow.
"NAFCU expects strong gains in consumer credit through the year, particularly in revolving credit as consumers return to spending," Long concluded.
Total consumer credit for credit unions was up 2.3 percent over the month; however, total consumer credit for credit unions 5.1 percent compared to a year prior. Total consumer credit at banks grew 1.9 percent over the year, and financial companies saw a 7.7 percent rise.
Credit unions' share of the market rose 0.1 percentage points to 12.2 percent in May. Meanwhile, banks' share grew 0.3 percent to 39.5 percent and financial companies' share dropped 0.1 percent to 13.5 percent.
For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.