Consumer Credit Sharply Above Expectations

Consumer credit came in sharply above expectations, up $23.3 billion in July as consumers ran up their credit-card debt after paying down some of it in the previous month. Revolving credit, reflecting credit card debt, rose $10.0 billion after falling an upward revised $0.2 billion previously, while non-revolving credit, where student loans and vehicle financing are tracked, rose $13.3 billion versus June's $14.7 billion.

The monthly increase shows revolving credit growth at the start of the third quarter accelerating to a scorching annualized rate of 11.25 percent, more than twice as fast as in the second quarter, which was the strongest quarterly growth in over a year. This a plus for consumer spending and retailers but a negative for household wealth.