Consumer credit grew at strongest pace since December 2014 in May

Total consumer credit rose 10 percent, at a seasonally-adjusted, annualized rate, in May and is up 3.8 percent versus a year ago. Revolving credit, which is primarily credit cards, rose 11.4 percent during the month and is down 2.2 percent compared to April 2020.

Non-revolving credit – primarily auto and education loans – rose 9.5 percent and is up 5.6 percent over the year.

“The shortage in semiconductors to build new vehicles could slow down nonrevolving credit in the coming months, but that will resolve itself as supply stabilizes,” said Curt Long, NAFCU’s chief economist and vice president of research, in a new Macro Data Flash report. “Where consumer confidence and the labor market are improving, consumer credit is likely to follow.

“NAFCU expects strong gains in consumer credit through the year, particularly in revolving credit as consumers return to spending,” Long concluded.

 

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