Total consumer credit fell 2.1 percent in August (seasonally-adjusted, annualized) after two months of solid gains. However, NAFCU Chief Economist and Vice President of Research Curt Long highlighted that this represented a 0.4 percent increase when compared to year ago levels.
“In the Federal Reserve’s most recent survey of bank lending standards, nearly three in four banks said they had tightened standards on credit cards over the past three months,” said Long in a NAFCU Macro Data Flash report. “But with the wind down of fiscal stimulus, there will be growing demand for short-term credit.
“NAFCU expects consumer credit growth to continue to decline over the near term, leading to more pain for households,” added Long.
Long noted that revolving credit drove the decline in August, while nonrevolving credit posted its smallest increase since April.
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