Впервые с момента падения из-за COVID, задолженность по кредитным картам уменьшается второй месяц подряд

On the surface, there were no major surprises in today’s consumer credit report: after last month’s $5.1 billion increase, consensus expected a sequential increase of $7.5 billion and it got almost exactly that: an increase of $7.37 billion to $3.758 trillion, up from $3.749 trillion in May.

However, taking a closer look at the components reveals something troubling.

While boring non-revolving credit increased by $8.4 billion or more or less in line with what it has done in recent months…

… an increase that in Q2 was driven in roughly equal part from contribution in student loans (+8.2BN) and auto loans (+$5.1)…

… the surprise was in the amount of revolving loans, i.e. credit card debt, which declined by just over $1 billion in June, which was the second consecutive monthly drop in the series…

… which is very notable because that would make it the first time since the economic collapse at the peak of the covid crash.

Which begs the question: is the a cause – i.e., will the economy now suffer a sharp slowdown with consumers clearly hunkering down and no longer charging it – or effect – has the economy already stalled and this is just the consequence. If indeed this is the latter, then expect a dramatic downward revision of all recent economic data, similar to what we saw last week with payrolls, as the US economy enters its new glideslope to a recession.