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Consumer credit growth accelerated in August
Total consumer credit rose 8.3 percent, at a seasonally adjusted, annualized rate, in August and is up 8.1 percent compared to a year ago. Revolving credit - primarily credit cards - rose 18.1 percent this month and is up 15.3 percent compared to August 2021. Non-revolving credit – primarily auto loans and education loans – rose 5.1 percent this month and is up 5.9 percent from a year ago.
“In August, revolving debt registered the third-largest monthly gain on record and the sixth straight month of double-digit growth,” said NAFCU Chief Economist and Vice President of Research Curt Long in the latest Macro Data Flash report. “With prices surging faster than wages, many Americans are dipping into savings or relying on credit cards to keep up.
"Real spending is on trend, so consumers in general are using debt to maintain their present lifestyle," added Long. "However, the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations indicates that consumers are dramatically downshifting their expected spending over the next 12 months.”
Total consumer credit for credit unions rose 1.3 percent, on a seasonally adjusted basis, in August, compared to a 1.4 percent gain for banks and 0.4 percent increase for financial companies. From a year prior, total consumer credit at credit unions rose 16.1 percent, while banks experienced a 12.8 percent gain and financial companies rose 0.2 percent.
Over the past 12 months, credit unions’ share of the market rose 0.9 percentage points to 12.9 percent. Banks’ share rose by 0.7 percentage points to 41.8 percent, and financial companies' share fell by 1 percentage points to 12.3 percent.
"NAFCU expects revolving debt will continue to track inflation, while non-revolving debt will be more muted due to ongoing difficulties with vehicle supply," concluded Long.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.