Consumer Credit Is Much Weaker Than Expected, Non-Revolving Turns Negative

by
Sharing is Caring!

via mishtalk:

Nonrevolving credit posted its first negative reading since April of 2020. The net change is the lowest since November 2020. The Fed will be pleased with this report.

Consumer credit data from the Fed, chart by Mish

The Bloomberg Econoday consensus was for credit to rise by $20.0 billion.

Instead, the rise was $7.3 billion. In addition, the Fed revised May credit from $23.0 billion to $20.3 billion.

See also  The storm surge for Hurricane Milton is expected to be 15 feet. To give you an idea of how deadly this is, here's what 9 feet looks like.

The consumer is clearly weakening as the lead chart shows.

Consumer Credit in Billions of Dollars

Consumer credit data from the Fed, government credit is student loans, chart by Mish

Those are nominal numbers. In nominal terms revolving credit, mainly credit cards, hit a new record high. Inflation adjusted numbers are much weaker.

Revolving Consumer Credit

Revolving consumer credit data from the Fed, Real (inflation adjusted) calculation and chart by Mish.

See also  Germany faces a wealth trap: Low homeownership, negative savings rates, and a failing economic model.

Resolving Consumer Credit Detail in Billions of Dollars

Adjusted for inflation, revolving credit is still less than the pre-pandemic high.

Real Consumer Credit

Real consumer credit is weakening, especially non-revolving. That reflects a slowdown in autos, housing, and student debt.

Heading Into Earnings Season, Let’s Discuss Actual Corporate Profits

 

Views: 54

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.