U.S. consumer credit rises at slowest pace since June 2018

U.S. CONSUMER CREDIT increased $9.5 billion in September, the slowest growth rate since June 2018. / BLOOMBERG FILE PHOTO/DAVID PAUL MORRIS
U.S. CONSUMER CREDIT increased $9.5 billion in September, the slowest growth rate since June 2018. / BLOOMBERG FILE PHOTO/DAVID PAUL MORRIS

WASHINGTON – United States consumer credit rose in September at the slowest rate since mid-2018 as Americans carried smaller credit card balances.

Total credit increased $9.5 billion, less than forecast, after a revised $17.8 billion gain in August, Federal Reserve figures showed Nov. 7. Borrowing increased at a 2.8% annualized rate, the slowest since June 2018.

Key insights

  • Revolving debt outstanding, which includes credit card debt, declined $1.1 billion after falling $2.2 billion. Non-revolving debt increased $10.6 billion, the smallest gain in four months, after a $20 billion gain in August.
  • The figures show consumers have been focused on paring credit-debt and other revolving debt after a July borrowing binge that was the biggest since November 2017. The slowdown could signal Americans are getting their finances in better shape ahead of the upcoming holiday-shopping season.
  • Total consumer credit increased an annualized 4.9% in the third quarter, the most since the final three months of 2018. The rate of revolving credit slowed to 2.2%, from 5.2% in the second quarter, while non-revolving debt increased an annualized 5.9%, the fastest in a year.

 

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  • Economists surveyed by Bloomberg had projected the credit gauge would rise by $15 billion.
  • Outstanding student loan balances rose to $1.64 trillion in the third quarter from $1.61 trillion in the previous three months. Balances for motor vehicle loans increased to $1.19 trillion from $1.17 trillion.
  • The consumer credit report doesn’t track debt secured by real estate, such as home mortgages.

 Katia Dmitrieva is a reporter for Bloomberg News.

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