What I Saw Last Week
Total Consumer Credit rose by $9.2B in April – below my forecast for an increase of $13.9B – after increasing an upwardly revised $12.3B (from $11.6B) in March.
The growth in April was driven by non-revolving credit, which increased by $7.0B from March to $2851.8B. Revolving credit increased by $2.2B to $1030.7B after decreasing by $1.1B in March.
Consumer credit increased at a seasonally adjusted annual rate of 3.0% in April, with revolving credit increasing at an annual rate of 2.5% and non-revolving credit increasing at an annual rate of 3.0%.
The takeaway from the report is that the increase in consumer credit was the lowest since September 2017, which suggests rising interest rates may have driven consumers to pay down debt and/or tempered their demand for credit.
What to Watch for This Week
Inflation – as measured by the Consumer Price Index – rose by 0.2% in April with the core rate up by 0.1%. Look for the May numbers to show total inflation up by 0.3% and the core rate 0.2% higher.
U.S. Retail Sales rose by 0.3% in April with core sales also 0.3% higher. I expect to see the May numbers having risen by 0.4% and 0.5% respectively.
Consumer Sentiment in May were measured at 98.0 and the early June number should show a jump to 99.0.