Consumer Credit Level Below Expectations

Consumer credit came in below consensus expectations, up $14.6 billion in June as consumers paid down their credit-card debt following accelerated spending in the prior months. Revolving credit, reflecting credit card debt, fell $0.1 billion in June after rising $7.5 billion previously, while nonrevolving credit, where student loans and vehicle financing are tracked, rose $14.7 million versus May's $10.3 billion increase.

Although the monthly drop indicates a loss of credit-card spending momentum, revolving credit for the second quarter still increased at an annualized rate of 5.3 percent, up from 1.5 percent in the first quarter and the strongest quarterly growth in more than a year. This is a negative for household wealth but it has been a positive to consumer spending.