Consumer Credit Jumps to Begin Q3

Wells Fargo Research Team Wells Fargo

Consumer credit rose $18.5 billion in July. Despite a continued slowdown in revolving credit growth, an uptick in nonrevolving credit growth allowed total consumer credit to grow 5.9 percent from a year ago.

Nonrevolving Credit Propels Consumer Credit

Consumer credit growth bested expectations in July with a $15.9 billion increase in nonrevolving credit in the first month of Q3. Revolving credit contributed an addition $2.6 billion.
Revolving credit remains just below its pre-recession peak while nonrevolving credit continues to set a record each month. With consumer confidence remaining solid, there is a good chance that revolving credit will reach a new high in early 2018.

Auto Loan Borrowing Pumping the Breaks

On a year-over-year basis, auto loan debt was up 5.5 percent in the second quarter. This marks a continued deceleration that has been a trend since mid-2015.
The July Senior Loan Officer Opinion Survey reported a fall in auto loan demand and an increase in the percentage of banks tightening standards for auto loans, so the private market does appear to be adjusting to credit concerns.

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Wells Fargo Research Team

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