U.S. consumer credit growth decelerates in June, nonrevolving credit growth to slow in near future

U.S. consumer credit growth decelerates at the end of the second quarter. Consumer credit grew USD 12.4 billion in June, as compared with consensus expectations of a rise of USD 15.54 billion. Nonrevolving credit growth has been decelerating for the last few years, and with the recent halt in revolving credit’s momentum, total consumer credit is slowing down.

Stable growth in nonrevolving credit earlier in the economic growth aided in spurring total consumer credit higher in spite of anaemic growth in the revolving space. However, revolving credit growth has stalled. Net-charge offs have increased and delinquencies are slightly up, although both of these series have risen from historically low levels.

On a year-on-year basis, student loan debt was up 6.2 percent in the June quarter. This marks a continued slowdown that has been a trend throughout the growth, noted Wells Fargo. The consumer price index for college tuition & fees has also slowed in the time frame. With auto loan lending showing signs of a pullback, the slowdown in nonrevolving credit growth appears likely to continue for the near future, added Wells Fargo.

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