The headlines say consumer credit rate of growth rose – and came in at market expectations. Our analysis shows year-over-year consumer credit growth rate insignificantly declined. There was significant upward revision of the 2015 data which did not change direction of trends – but did flatten the trends.


The headline said:

In July, consumer credit increased at a seasonally adjusted annual rate of 6-3/4 percent. Revolving credit increased at an annual rate of 5-3/4 percent, while nonrevolving credit increased at an annual rate of 7 percent.

Econintersect’s view:

Unadjusted Consumer Credit Outstanding

  Month- over- Month Growth Year- over- Year Growth Month- over- Month Growth without Student Loans Year- over- Year Growth without Student Loans Total -0.1 % +6.9 % -0.1 % +4.6 % Revolving -0.1 % +4.1 % n/a n/a Non- Revolving -0.1 % +7.9 % -0.1 % -4.9 %

Overall takeaways from this month’s data:

  • Student loan year-over-year growth rate has been decelerating gradually since the beginning of 2013;
  • Student loans were a negligible influence again this month, as its year-over-year rate of growth is about the same rate as the consumer credit in general – the effect of student loans is not noticeable in the trends. This month specifically, student loans growth rate declined 0.1% month-over-month and year-over-year growth is now 13.8% year-over-year.
  • Revolving credit (credit cards and this series includes no student loans) which had been slightly accelerating for most of 2014, is now decelerating in 2015. Specifically this month revolving credit rate of growth did decline insignificantly.
  • The market expected consumer credit to expand $17.0 B to $24.0 B (consensus = $18.0 billion) versus the seasonally adjusted headline expansion of $17.9 billion reported.

    Note that this consumer credit data series does not include mortgages.

    The Econintersect analysis is different than the Fed’s:

  • an effort is made to segregate student loans from consumer credit to see the underlying dynamics;
  • this analysis expresses growth as year-over-year change, not one month’s change being projected as an annual change – which creates significant volatility and distortion.
  • where our analysis expresses the change as month-over-month, month-over-month change is determined by subtracting the previous month’s year-over-year improvement from the current month’s year-over-year improvement.
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