Consumer Credit Rises Sharply

Consumer credit is up strongly at the headline level but there's slowing in the revolving credit component which is where credit cards are tracked. Total credit rose $17.7 billion in July, up from an upwardly revised $14.5 billion in June. Revolving credit, however, rose only $2.8 billion in the month, down from June's $9.2 billion. Reluctance to use credit cards may be a plus for long-term consumer health but it's a short-term negative for the nation's retailers and service providers. Non-revolving credit continues to post very strong gains, up $14.9 billion in July and reflecting strength in vehicle financing and student loans which are tracked in this component.

Recent History Of This Indicator:
Consumer credit is expected to rise $15.6 billion in July following June's $12.3 billion gain which is soft for this reading. Gains for revolving credit (credit cards) have been limited in this report but not in June when the component rose an outsized $7.7 billion. Non-revolving credit has been the consistent strength of this report, underpinned by student loans but also reflecting solid demand for vehicle financing.