The key chart
The key message
US consumer credit demand remains strong in absolute and relative terms but the growth momentum is slowing. A key signal to watch in 4Q22 and beyond…
The US has seen 25 consecutive months of positive monthly consumer credit flows since August 2020. The latest data FED data point for September 2022 (published yesterday, 7 November 2022), showed a monthly flow of $26bn (3m MVA). This was 1.8x the average pre-COVID flow of $14.8bn. Comparable multiples for the euro area and UK were 0.6x and 1.0x average pre-COVID flows respectively, highlighting one reason for the relative strength of the US recovery.
In my previous post (before yesterday’s data release), I highlighted that US monthly flows had been more than double their pre-COVID average since March 2022 and suggested that, “the risks to the US growth outlook include the sustainability of current consumer credit demand.”
September broke this trend and while it is too early to draw definitive conclusions it is important to note the slowing growth momentum since April 2022 when monthly flows peaked at $37bn (3m MVA), 2.5x the pre-COVID average (see key chart above).
A key signal for 4Q22 and beyond…
Please note that these summary comments and the chart above are abstracts from more detailed analysis that is available separately.