Consumer credit growth slows in October

After showing signs of momentum, consumer borrowing slowed in October, according to Federal Reserve data released Monday.

Total consumer credit increased $7.2 billion. That’s an annual growth rate of 2.1%. This was down from a $15 billion gain in September.

Economists has been expecting the strength in September to continue and had penciled in a $17 billion increase, according to Econoday.

Revolving credit, like credit cards, fell 6.7% in October after a 3.2% jump in the prior month, which was the first gain in the category since the pandemic struck in March.

Nonrevolving credit, typically auto and student loans, rose at a 4.8% rate after a 4.7% rate in September. This category tends to be have steady gains each month. 

Separate data from the New York Fed found that credit-card balances fell by $10 billion in the third quarter after a record $76 billion decline in the second quarter.

The data does not include mortgage loans, which is the largest component of household debt. Mortgage originations came in at $ 1 trillion in the third quarter, the second largest quarterly increase on record, the New York Fed said.