June Consumer Credit Falls More Than Expected

Consumer credit fell -US$10.3bn in June, with May’s release being revised down to -US$5.4bn.  The street consensus was for a drop of -US$5.0bn.  This index does not included mortgages or any loans backed by real estate.  Looking at the index’s components, revolving credit (credit card balances) dropped -US$5.4bn in June compared to -US$4.9bn in May.  Non-revolving credit (auto credit ex-leases, vacation loans, student loans, etc…) diminished by -US$5.0bn in June vs -US$0.5bn a month prior.  This indicator continues to be influenced by weakness in the labor market and a reduction in the use of credit cards.  This decline coincides with a 4.7%y/y drop in wages and salaries in June.  June also saw a record in credit card defaults.

Source: St. Louis Fed