Economic Report: U.S. September consumer credit grows at slowest rate in 15 months
The numbers: U.S. consumer borrowing grew in September at the slowest rate in 15 months, according to Federal Reserve data released Thursday. Total consumer credit increased $9.5 billion, down from $17.8 billion in August. Economists has been expecting a $15 billion gain, according to Econoday.
The September gain was well below the monthly average growth for the first eight months of the year of around $16 billion. It translates into an annual growth rate of 2.8%, the slowest since June 2018.
What happened: Revolving credit, like credit cards, fell for the second straight month in September. That’s the first time this has happened since the summer of 2012. Borrowing fell 1.2% after falling 2.5% in August. It is the third decline in revolving credit in the past four months.
Non-revolving credit, typically auto and student loans, rose 4.2% in September, the slowest rate in four months.
The data does not include mortgage loans.
What are they saying: “The credit card spending trend appears to show that while consumers remain willing and able to spend, they are doing so only cautiously and are still reluctant to take on substantial debt,” said T.J. Connelly, head of research at Contingent Macro Research.
Big picture: With business investment sagging, all eyes are on the consumer to keep the expansion on track. Fed Chairman Jerome Powell told reporters last week that the Fed hasn’t seen the weakness from business spending “getting into the consumer side of the economy.” But many economists worry about increasing layoffs in coming months.