Consumer credit outstanding grew 5.8 percent in May, the fastest monthly growth in six months, according to data released by the Federal Reserve.
Non-revolving credit, which is mostly motor vehicle and education loans, increased 4.7 percent, while revolving credit, which primarily consists of credit cards, rose 8.7 percent.
“Following a disappointing April, consumer credit expanded at the fastest pace in six months during May,” Curt Long, chief economist and director of research at the National Association of Federally Insured Credit Unions wrote in a Macro Data Flash, a publication of NAFCU based on Federal Reserve data.
“Revolving credit growth accelerated to a six-month high, while non-revolving credit growth remained solid despite moderating vehicle sales,” Long added.
Long said the outlook for consumer lending remains positive due to a strong labor market and positive consumer confidence. “However, robust growth is unlikely with auto demand fading and borrowing costs on the rise,” he wrote.
Further, the data shows that consumer credit outstanding rose 0.8 percent at credit unions, 0.9 percent at banks, and 0.3 percent at financial companies.
Credit unions’ share of the total consumer credit market edged up to 10.6 percent in May, while banks had 39.7 percent and financial companies held 17.4 percent of the market.