July 09, 2014

Consumer credit growth slows in May

July 10, 2014 – Consumer credit growth slowed to an annualized 7.4 percent in May, but non-revolving credit growth remained solid at 9.3 percent, according to new data from the Federal Reserve.

NAFCU Senior Economist Curt Long analyzed the data for a Macro Data Flash and found that non-revolving credit growth remained steady due to consumers taking advantage of low interest rates to buy vehicles and young adults taking out education loans.

Revolving credit, which is mostly credit cards, grew by 2.5 percent.

"Total consumer credit growth at credit unions outperformed banks and financial companies in the first quarter, expanding by 1.6 percent, while credit growth decreased at banks by 2 percent and at financial companies by 1.4 percent," Long noted. "Credit unions also saw the largest consumer credit growth in May – 1.9 percent."

Credit unions' share of the total consumer credit market was 8.9 percent in May. Banks and financial companies held 40.4 percent and 21.4 percent, respectively.