Consumer credit in the United States has unexpectedly fallen, marking the first decline this year, as revolving credit contracted.
Data released by the Federal Reserve on Wednesday showed that total outstanding consumer credit decreased by approximately $182 million in May, following substantial increases in the prior two months. The median estimate from economists surveyed by Bloomberg was for an increase of $17.5 billion.
Revolving credit balances, which include credit cards, fell by $5.3 billion, the largest drop recorded in 2024. In contrast, non-revolving credit, such as auto and student loans, increased by $5.1 billion during the same month. The report does not include mortgage debt.
Household spending has shown resilience in recent months, even as price shocks from oil price increases, particularly evident in gasoline costs, have driven prices higher. The data indicates that after two consecutive months of the largest gains in consumer credit in over three years, Americans have begun to pay down some of their debt.
Recent declines in retail gasoline prices have made consumers more optimistic and may provide some relief in the coming months. However, costs are still expected to remain elevated in the near term, with inflation continuing to outpace wage growth across a range of sectors.
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