According to the National Association of Federally-Insured Credit Unions (NAFCU) Macro Data Flash report, consumer credit increased 10.6 percent in June and is up 4.2 percent compared to a year ago.
“On a seasonally-adjusted basis, consumer credit grew at the strongest rate in years once again,” Curt Long, NAFCU’s chief economist and vice president of Research, said. “Revolving credit grew at its fastest pace in recent history and twice as fast as the previous month.”
Per the analysis, revolving credit, which officials identify primarily as credit cards, rose 22 percent during the month and is down 0.2 percent compared to June 2020, while non-revolving credit, identified primarily as auto and education loans, increased 7.2 percent and is up 5.5 percent over the year.
“Trends in revolving debt can be difficult to parse; growth may reflect increased spending as consumer confidence is restored, but it may also reflect emergency spending by households still suffering through job loss and nearing the end of enhanced unemployment benefits,” Long said. “Non-revolving credit growth slowed in June, mostly as a result of lower vehicle sales.”
Long said NAFCU expects strong gains in consumer credit throughout the remainder of the year, particularly as it relates to revolving credit, as the job market improves and spending patterns are restored.