Consumer credit rose more than anticipated in June, according to USA Today.
What’s going on: “Overall credit increased $17.8 billion, topping economists’ average forecast for a $13 billion gain, to $4.977 trillion in June, the Fed said late Monday. May’s borrowing also was revised up by about $2 billion.”
- However … despite the June rise, “overall credit increases have moderated over the past year, showing the Fed’s aggressive interest rate hikes to squelch spending and lower inflation are working.”
“Nonrevolving” credit: Nonrevolving credit—lump sums repaid only once, such as those for school tuition and car purchases—jumped by $18.5 billion to $3.735 trillion, largely on the strength of auto sales.
Short-term debt: Short-term debt, such as credit card debt, fell in June for the first time in more than two years, to $1.262 trillion. This is likely due to the sharp increase in credit card interest rates, according to a report cited by USA Today.
The big picture: Consumer spending has stayed steady despite rising inflation owing to savings built up during the global pandemic.