Consumer Credit:  Trend Still Higher Despite Miss

Bottom Line: Consumer credit rose substantially less than expected in June as consumers net paid down credit card debt. That said, after May's strong credit growth, both revolving (mainly credit cards) and non-revolving credit (mainly student loans) are accelerating just slightly in 2018 following about 3 years of slower growth. Consumer Credit ROSE by $10.2 billion in June, compared with market expectations for an increase of $15.0 billion. Additionally, the prior two months were revised lower by $0.4 billion. Over the past year, consumer credit has increased by $176.3 billion or 4.7%. Revolving Credit, including credit cards, FELL by $0.2 billion. Over the past year, revolving credit has increased by $47.3 billion or 4.8%. Revolving debt is now close to its 2006-2007 levels and just 1.7% above its July 2008 peak. Non-Revolving Credit, including auto and education loans, ROSE by $10.4 billion. Over the past year, non-revolving credit has increased by $129.0 billion or 4.7%. Of this amount, $92.9 billion, or 72.0%, appears to be due to increases in student loans held by the federal government.