US consumer credit rises $18B in July, surpassing estimates

US consumer credit expanded by $18.06 billion in July, blowing past analyst expectations that ranged from $11.7 billion to $16 billion. The Federal Reserve’s G.19 report, which tracks non-mortgage household borrowing, showed Americans reaching for their credit cards and auto loans at a pace that caught forecasters off guard.

The July figure represents a meaningful acceleration from June’s $14.17 billion increase and a sharp reversal from May, when consumer credit growth was essentially flat.

The numbers in context

Total outstanding consumer credit stood at roughly $5.17 trillion as of June, split between approximately $1.35 trillion in revolving credit (think credit cards and lines of credit) and $3.82 trillion in nonrevolving credit (auto loans, student loans, personal loans). The July increase pushes that total even higher.

The G.19 release specifically excludes mortgage debt, so these numbers reflect the borrowing Americans do for everything else in their financial lives.

Zooming out further, total US consumer debt including mortgages reached approximately $18.25 trillion as of the most recent Equifax data, reflecting a 2.1% year-over-year increase.

What the acceleration means for the economy

Consumer spending accounts for roughly two-thirds of US economic activity, making credit growth one of the more reliable leading indicators of where GDP is headed.

Delinquency metrics have also been improving, according to broader industry data. That combination, rising credit usage paired with stable or improving repayment behavior, is about as healthy a consumer picture as economists can ask for.

The Federal Reserve’s dilemma

Year-over-year growth in total consumer credit has been running in the low-to-mid single digits, which remains historically manageable.

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