Consumer Credit Slips in April

Wells Fargo Research Team Wells Fargo

Consumer credit growth was below expectations in April, although upward revisions to March offset some of the slowdown. On a year-ago basis, revolving and nonrevolving credit are growing at about the same pace.

Consumer Credit Growth Decelerates

Consumer credit rose by just $8.2 billion in April, the slowest pace since mid-2011. Both nonrevolving and revolving credit growth were soft in the month.
Revolving and nonrevolving credit growth have continued to move in lockstep on a year-ago basis. This convergence makes sense as student and auto lending cool, while revolving credit plays catch up after an unusually slow recovery.

On Trend, Growth Still Fairly Steady

As illustrated in the chart below, total consumer credit growth has slowed modestly over the past couple years. Credit growth has remained relatively even-keeled throughout this expansion, particularly given the steep decline and fairly modest bounce back that occurred during and after the Great Recession. Relative to disposable income, however, consumer credit remains elevated.

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Wells Fargo Research Team

Wells Fargo

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