Student, Auto Loans Hit Record High As Credit Card Debt Surges

Tyler Durden's picture

The Fed's latest consumer credit report revealed that in the month of June, overall household credit rose a smaller than expected $12.3 billion, below the $17 billion expected, and below last month's $17.9 billion increase.

 

The reason for the miss in credit growth was entirely due to the unexpected slowdown in non-revolving credit, which rose by only $4.6 bilion, the second lowest monthly increase since 2012 with just December 2015 posting a slower rate of increase. It is possible that the decline in new non-revolving, i.e., auto credit creation was the reason for the slowdown in auto sales over the past several months.

 

The flipside, however, was the jump in revolving credit, which rose by $7.7 billion in June, the second highest monthly increase since the financial crisis, and confirms what we observed previously, namely that as US personal savings are declining at a rapid pace, consumer have had no choice but to "charge it."

 

In any case, with the Fed releasing its quarterly update on both auto and student loans, we have two new records: a new all time high in both car loans at $1.1 trillion, and a record for student loans, which just hit $1.4 trillion.

 

Finally, as @Not_Jim_Cramer points out, the dominant source of consumer credit remains one and the same.

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JamesBond's picture

I am sure the auto industry is lobbying heavily to make the payments on car loans non-discharageable.  If not, they are fools in the fools game.  

Bill of Rights's picture

Party on Garth.... SPEND BUY BORROW SPEND BUY BORROW!...

SmittyinLA's picture

Khaaaaaan was involved in the VISA student loan gig with Hillary, selling US citizenship with fees from sub-prime student loans.

They* don't break out the immigrant and alien debt, only the totals secured by US taxpayers. (All of it)

SmittyinLA's picture

Those Chicano Studies students live large

wisehiney's picture

Can you say future demand pulled way forward?

Wonder what the poor folks are doing?

Picking strawberries and averaging into TLT!

 

NEOSERF's picture

School loans are used to buy cars and kegs

snakehead's picture

We're rich, bitch.

-Fed

homebody's picture

They are counting on Hitlery getting elected so loans will never have to be repaid.

Bunga Bunga's picture

What can go wrong?

WTFUD's picture

That's another fine mess you've got me into Muttley.

moonmac's picture

Wilma Flintstone and Betty Rubble yelling “Charge It” as they head out on a shopping spree.

yellowsub's picture

No money to buy cars but they can still qualify for a 0% down mortgage...

JailBanksters's picture

That's good then, it's increasing the GDP, the Gross Debt Product