Consumer credit growth speeds up as revolving borrowing rebounds
September credit grows at a 6.4% annual rate. The Fed figures measure borrowing, not a verdict on consumer spending.
U.S. consumer credit expanded at a faster pace in September, with revolving borrowing rebounding after an August decline. The Federal Reserve's report released Friday put total credit growth at a seasonally adjusted annual rate of 6.4%, up from 1.9% in August.
Outstanding consumer credit reached about $5.224 trillion. The monthly increase was about $27.8 billion. That dollar change is different from the 6.4% annualized growth rate, which expresses September's pace on a yearly basis rather than saying balances rose 6.4% in one month.
Revolving borrowing led the acceleration
Revolving credit, which includes credit-card borrowing, increased at a 14.5% annual rate after a revised 4.4% decline in August. Nonrevolving credit, including vehicle and education loans, increased at a 3.6% annual rate.
For the third quarter as a whole, total consumer credit grew at a 4.2% annual rate. Revolving credit increased 4.1% and nonrevolving credit increased 4.2%. The quarter's pace was less dramatic than September's monthly reading.
More credit does not settle the spending question
The report measures borrowing outstanding, not retail sales or household income. It also excludes loans secured by real estate, so it is not a complete measure of household debt.
A rise in credit can support purchases, but this release alone cannot show whether households are borrowing by choice, facing more pressure, or becoming more confident. It does not measure missed payments or establish a new trend from a single month.
September's figures are preliminary, and the report revises earlier months. The practical signal is a pickup in credit growth, especially revolving credit, rather than proof of either a consumer boom or a credit crisis.
