The Federal Reserve has released its reading on consumer credit with an increase for July showing an annual growth rate of 6%.  What Ben Bernanke keeps talking about is lower household spending and that was the case as revolving credit (credit cards) decreased at an annual rate of 5.25%.  Non-revolving credit (auto, personal, and student loans) increased at an annual rate of 11.25%.

The total credit came to $2.4
415 trillion, which is running higher than the averages of $2.4019 trillion in the first quarter and higher than the $2.4235 trillion in second quarter.  Total credit was up $11.97 billion for July, and Dow Jones had estimates of about $6 billion.

June was up as well, but it was revised to a lower gain.  The new June Consumer Credit was up $11.35 billion rather than the $15.53 billion prior reading.

The gain in credit is good to see for economic growth, but the reality is that this trend showing a drop of more than $3.4 billion in credit cards and other short-term borrowings by the consumer just shows more consumer deleveraging.  It is still happening.

The full report on consumer credit is here.

JON C. OGG