U.S. consumer credit growth likely to have slowed in June

U.S. consumer credit growth is expected to have slowed in June after rising in May. Consumer credit in the month had risen USD 18.4 billion in May which was the largest rise seen so far this year. Revolving credit, which includes credit cards, led the acceleration in May, while the rise in nonrevolving loans, which mainly consists of motor vehicle and education loans, remained stable. Interest rates also continued to drift higher in May for credit card and auto loans.

Consumer credit as a share of disposable income remained stable at 26.5 percent in May, as disposable income rose 0.4 percent that month. However, disposable personal income remained flat in June, which implies that measure could rise if credit continues to rise. Spending was also weak in June, which increases the likelihood that consumer credit growth also might have decelerated, although it would not take much of a rise to push the ratio of credit to income to an all-time high, stated Wells Fargo in a research report. According to consensus expectations, consumer credit is expected to have risen USD 16 billion.

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