Consumer credit grew at a 1.9% annual rate in August as credit-card balances fell

Americans' borrowing grew more slowly in August as credit-card balances declined, according to the Federal Reserve's G.19 consumer credit report, released on October 7.

What happened

"In August, consumer credit increased at a seasonally adjusted annual rate of 1.9 percent," the Fed said. "Revolving credit decreased at an annual rate of 4.2 percent, while nonrevolving credit increased at an annual rate of 4.1 percent." The Fed's report is preliminary and subject to revision.

The rate of growth was down from the previous month's pace of 4.1% in July, according to the Fed's table, and below the 3.6% rate in June (both as revised in the report).

The balances

Total consumer credit outstanding, excluding loans secured by real estate, was $5.197 trillion in August, up from $5.188 trillion in July, according to Federal Reserve data on FRED. Revolving credit was $1.352 trillion, down from $1.357 trillion in July. The decline of about $4.8 billion in the month is what produced the negative annualized rate (computed). Nonrevolving credit, which includes auto and student loans, rose to $3.844 trillion from $3.831 trillion.

What to watch

Banks reported separate credit-card figures this week. Synchrony said 30-day-plus delinquencies on its loans were 4.34% of receivables at the end of the quarter, down from 4.39% a year earlier. The Fed's next G.19 release, covering September, will show whether the August dip in card balances continues.