Consumer Credit Rises, But Slowdown Being Forecast

WASHINGTON—Total consumer credit rose 5.2% in April (seasonally-adjusted, annualized) and is up 5.3% versus a year ago. However, NAFCU Chief Economist and Vice President of Research Curt Long said while April revealed upward growth trends, overall growth is expected to decline in coming months.

consuemr credit

"Consumer credit registered the strongest growth rate in five months during April," said Long in a NAFCU Macro Data Flash report. "Household balance sheets are in decent shape and consumer sentiment remains strong. In taking a more dovish stance, the Federal Reserve is doing its part to support borrower demand, or at least to not dampen it.

"However, the Fed's most recent loan officer survey indicates that supply constraints are a factor, as rising delinquencies lead lenders to tighten their underwriting standards. NAFCU is forecasting slower economic growth over the rest of 2019, which will lead to more moderate growth in credit," Long added.

Where Credit Unions Stand

Total consumer credit for credit unions grew 0.7% in April from the previous month, compared to a 1.0% increase for banks and a 0.1% increase for financial companies. From a year prior, total consumer credit at credit unions rose 11.2%, while banks saw a 5.2% increase and financial companies saw a 0.4% decline.

Credit unions now own 11.8% of the market, unchanged from a year ago. Meanwhile, financial companies' market share fell from 13.9% to 13.2% over that period, while banks' share fell from 41.4% to 41.3%, Long said.

As reported here, Long is among those economists who believe the recent lackluster jobs report will lead the Fed to cut rates at some point later this year.

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Copyright Year: 2019
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