May Consumer Credit Preview
May Consumer Credit is expected to increase $7.3bln after growing $8.9bln, or 4.2%, in April.
Use of revolving credit (e.g. credit cards) increased only $300.4mln in April, or 0.4%, following a $5.8bln increase in March. Non-revolving credit (e.g. student loans) rose $8.6bln, or 6.5%, after increasing $7.3bln the prior month.
April’s revolving credit number was fairly low, likely reflecting seasonal factors since borrowing doesn’t typically pick up until summertime. Since consumer spending data have held up over the period, if May’s borrowing is similarly muted, data may be painting a picture of consumers switching from credit cards to cash — no surprise in the current environment, with consumer confidence near all-time lows.