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Consumer borrowing slowed more than expected in June (Investopedia).

What’s going on: “Consumer credit increased by $8.9 billion in June, putting growth at an annual rate of 2.1%. Economists surveyed by The Wall Street Journal and Dow Jones Newswires had projected credit would increase by $9.7 billion.”

• Revolving credit, which consists mostly of credit card accounts, dipped by $1.7 billion in June. That’s the largest decline in more than three years.
• However, the Wednesday Federal Reserve report containing this data also showed a revised reading for credit in May, putting it at $14 billion, almost $3 billion more than the initial estimate.

Why it’s important: Consumer spending makes up more than half of the U.S. gross domestic product, making it a strong economic indicator. Robust spending supported growth in 2023 and “despite some weakening, has so far remained resilient in 2024.”

What it means: “Softer demand for credit will likely impact lower-income consumers the most, but overall, the data suggest a slowdown in consumer spending for the rest of this year,” one economist told Investopedia.