Consumer Credit Growth Slowing

Consumer credit growth slowed dramatically in July, rising at the slowest pace since last December, and June's high growth rate was revised substantially lower. In July, consumer spending rose +$4.6B (consensus $8.5B, prior (June) revised down to $11B from $14.3B previously). This report covers credit card and non-revolving debt, but doesn't include mortgage debt. The worsening employment market is restraining consumer debt growth. The pace of credit growth slowed to 5.3% YoY in July from 5.5% in June. The slump in auto sales to the lowest level in over a decade caused non-revolving debt, which includes auto loans, to rise at the slowest pace of the year, at $678 million in July. Revolving debt, which includes credit cardss, rose by $3.9B in July as banks raise interest rates and tighten credit. In July, revolving debt grew at an annual rate of 4.75% MoM and non-revolving credit rose by 0.5% MoM. The average maturity of an auto loan rose to 67.2 months from 63.5 months in June, and the loan-to-value ratio rose to 96% from 93% in June. Both figures are at 5-year highs.