WASHINGTON (12/8/15)--Consumer credit rose at credit unions nationwide by $2.1 billion in October, according to numbers released by the Federal Reserve Monday.
Nonrevolving credit drove the gains with a $2.1 billion jump to $287.9 billion, while revolving credit remained largely flat at $47.6 billion.
Nonrevolving credit reflects the growth of loans for large purchases such as automobiles and education, while revolving credit reflects credit card use.
For all major holders nationwide, consumer credit advanced $16 billion in October, which was below analyst expectations of a $20 billion increase. Similar to credit unions, revolving credit inched up by 0.25% and nonrevolving credit climbed 7.4%.
“Consumer credit unsurprisingly cooled from its rapid September growth,” said Thomas McCartin, Moody’s analyst (Economy.com Dec. 7). “Revolving credit was little changed, posting its weakest monthly growth since February. That said, the larger context is more upbeat. Year-over-year growth in revolving credit exceeded 4% for the third straight month … Implications from holiday spending are unclear at this point.”
Revolving credit for all major holders rose $200 million during the month, while nonrevolving balances increased $15.8 billion.
“The nonrevolving segment will drive consumer credit growth,” McCartin said. “Consumers will stop buying vehicles at the current unsustainable pace at some point. The expected rate hike at the December Federal Open Market Committee meeting is unlikely to weigh on vehicle sales because it is expected to be small.”