Consumer Debt Showed Signs of Slowing in Q2

The US Federal Reserve on Monday (8-7-23) released its latest G.19 Consumer Credit Report (CCR). According to the CCR, with further analysis provided by the National Association of Home Builders (NAHB), consumer credit outstanding growth slowed to 4.0% in 2023Q2 (seasonally adjusted annual rate), as revolving and nonrevolving debt grew at 7.1% and 3.0%, respectively. Revolving credit growth has decelerated as of late, a result of both cooling inflation and increasingly tight lending standards.

Total consumer credit outstanding stands at $5.0 trillion (break-adjusted and seasonally adjusted), with $1.3 trillion in revolving debt and $3.7 trillion in non-revolving debt.

Seasonally adjusted revolving and nonrevolving debt accounted for 25.3% and 74.7% of total consumer debt, respectively. Revolving consumer credit outstanding as a share of the total decreased 0.1 percentage point over the quarter but increased 0.4 percentage points over the past year.

With every G.19 report, the Federal Reserve releases a memo item covering student and motor vehicle loans’ outstanding. The Q2 release shows that the balance of student loans was $1.77 trillion (not seasonally adjusted), while the amount of auto loan debt outstanding stood at $1.53 trillion (not seasonally adjusted).

The Federal Reserve notes that together, student and auto loans made up 88.2% of nonrevolving credit balances—the smallest share since 2010 and 0.5 percentage points lower than the share in 2022Q2.