Econintersect analysis is that total consumer credit growth accelerated 0.1% month-over-month, and the year-over-year growth is 6.7%. The seasonally adjusted consumer credit headlines are showing a growth of 7.5%. In the unadjusted data, the change of the rate of expansion of consumer credit is statistically the same whether one includes student loans or not.
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Consumer credit growth has been in a tight range for over a year. When student loans are backed out, the rate of expansion of consumer credit is:
- expanding;
- significantly better than the current growth of GDP.
The headline said:
In May, consumer credit increased at a seasonally adjusted annual rate of 7-1/2 percent. Revolving credit increased at an annual rate of 2-1/2 percent, while nonrevolving credit increased at an annual rate of 9-1/4 percent.
Econintersect’s view:
Unadjusted Consumer Credit Outstanding
| Â | Month- over- Month Growth | Year- over- Year Growth | Month- over- Month Growth without Student Loans | Year- over- Year Growth without Student Loans |
| Total | +0.1% | +6.7% | +0.5% | +3.8% |
| Revolving | -0.1% | +2.3% | n/a | n/a |
| Non- Revolving | +0.2% | +8.3% | -0.9% | +5.9% |
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Overall takeaways from this month’s data:
- Student loan growth has been decelerating for the past 15 months;
- Non-revolving credit growth weakened compared to the previous month (which was unusually strong) – and revolving credit (credit cards) also weakened;
- The backward revision this month again was moderate.
The market expected consumer credit to expand $13.8 to $22.0 billion (consensus = $19.6 billion) versus the seasonally adjusted headline expansion of $19.6 billion reported.
Note that this consumer credit data series does not include mortgages.
The Econintersect analysis is different than the Fed’s:
- an effort is made to segregate student loans from consumer credit to see the underlying dynamics;
- this analysis expresses growth as year-over-year change, not one month’s change being projected as an annual change – which creates a lot of volatility.
- where our analysis expresses the change as month-over-month, month-over-month change is determined by subtracting the previous month’s year-over-year improvement from the current month’s year-over-year improvement.
