Consumer credit is weak in nominal terms and negative in real terms.
Nominal consumer credit has started to flatline. In real terms, credit is declining.
Real Consumer Credit in Billions of Dollars
Government credit is primarily student loans.
Note that real nonrevolving credit excluding government is 1.726 trillion, down from 1.824 trillion on August of 2021.
In real terms, people are paying off mortgages etc., faster than they are taking mortgages on new mortgages.
Consumer Credit Monthly Change
Consumer Credit Change Details
- Total: +0.36 Billion
- Nonrevolving: +6.32 Billion
- Nonrevolving Excluding Government: -5.30 Billion
- Revolving: -5.96 Billion
Revolving Consumer Credit in Billions of Dollars
Revolving Credit Details
- Real revolving credit peaked at the start of the Great Recession at 1.148 trillion.
- The post-Covid real revolving peak was 1.085 trillion.
- Real revolving credit is now 1.026 trillion.
- In nominal terms, revolving credit peaked in November of 2024 at 1.350 trillion.
Revolving Consumer Credit in Billions of Dollars Detail
Real Consumer Credit Detail Percent Change from Year Ago
Real Percent Change from Year Ago Details
- Total: -2.5 percent
- Nonrevolving: -1.6 percent
- Nonrevolving Excluding Government: -3.3 percent
- Revolving: -5.1 percent
These are very weak recession-looking numbers.
Related Posts
October 4, 2025: About 100,000 Government Workers Are Off the Payrolls as of October 1
Trump is shrinking government payrolls. And another big cut is coming.
October 5, 2025: Trump Adopts Chicago Cubs’ Perpetual Message, “Wait Till Next Year”
“One Big Beautiful Bill” did not resonate. Trump opts for “Wait Till 2026”.
October 7, 2025: GDP for 2025 Q3 May Be Delayed. What Are the Current Estimates?
GDPNow issued an update today but it’s missing a lot of key inputs.
Not sure what to think of this data. It shows real revolving debt basically the same for 2003-2025 (with some small bobbles up and down in the middle). If you consider population increase over the past 22 years the average real revolving debt per person has gone down. How to square this with stories of people increasingly drowning in debt. I wonder where buy not pay later is in this data? Technically it is a short term loan, i.e. not revolving. But if people continually get new BNPL loans as they pay them off it is essentially revolving like credit cards. Another possibility is that BNPL is not captured at all in this data.
That’s the worst decline in the 56 year data series of real non-revolving credit without a recession being declared. I don’t need a government to tell me there is a recession when I have these eye popping charts.
I would like to add consumer debt is only one kind of debt. It would be very interesting to see the amount of margin debt now compared to the DotCom and Housing bubbles. It would have to be normalized to something like the SP500, Dow Jones Industrials, or even gold.
Another great article.
You gotta wonder when the stock market will notice.
And the bond market. No matter how many data points signal recession, the yield on the ten year can’t crack under 4.00%. It’s 4.12 now.
Credit quality would justify 6%.
In 2007-2009, the 10 year yield rolled over a bit before the stock market (July 2007 vs. October). The 10 year yield actually rose a bit in the middle of the recession (March-July 2008) since inflation back then was also high, and didn’t roll over until mid-2008. The 10year yield bottomed in Dec 2008 / January 2009, well before the stock market.
So the two big opportunities in long Treasuries were July 2007 to March 2008, and then October 2008 to January 2009.
There were excellent opportunities in long-term TIPS then as well.
History doesn’t repeat exactly, but it might rhyme?
AI will become the consumer of last resort! Moar, moar, moar energy, water, data, soylent green … wait, wut? Soylent green?
More evidence suggesting we live increasingly in a two-track society. The higher-income groups keep powering overall consumption ahead through their rapidly rising incomes and assets, while the lower-income groups with meager income growth (see recent median wage data) and few assets have to cut back their consumption and credit. Result: the overall economy in terms of GDP and consumption looks great, the higher-income folks are happy, but the bottom 50 percent of the population is mad as hell and is buying the snake oil cures, including tariffs, deportations, and, most recently, “heritage Americans,” peddled by Trump and his ilk.
Too bad for those in the slow lane, huh?
– More evidence suggesting we live increasingly in a two-track society.
> You’re basically going with the Haves and Have Nots, but I don’t see it that way. I see the item choices now mostly geared to the Haves and the Want To Be Have Nots.
>> Remember when they had Rolex and Times and a few in between. Now they make Rolex A, B & C and a couple just beneath and more affordable if you will. IMO this would only be done if they are Consumer Driven to do so. Hence what I said above, as there is no bottom addressed but a lot that try to act like it, spend like it, until they don’t. That’s a huge crowd!
– Result: the overall economy in terms of GDP and consumption looks great, the higher-income folks are happy, but the bottom 50 percent of the population is mad as hell.
> I’ll say 30% on the bottom and stuck, another 30% Wannabes who are charging and pretending. A final 40% with the Money, are buying everything that they want. I’m OK with this. The two 30’s will swap back and fourth with a few moving UP, and a few moving IN.
>>> Sometimes Life is simply what you’re looking at, and no more. Perhaps a different slant on things, but “It Is What It Is” has always rung a bell for Me…
Sounds like a somewhat more complex version of the consumption model I had in mind. But I am a fan of Occam’s razor, and my interest is to understand how we can have a thriving economy while half of the country is in serious economic trouble. Add to that that Trump is busily trying to widen the gap between the haves and have nots, and we are all in for serious trouble.
It’s over.
“You crazy with the heat. Credit is no good for a notions salesman.”
I have it on good authority that credit is also no good for an anvil salesman.
It is not a long-term plan to spend tomorrow’s money on consumer goods today.
Well paying down debt in a secular depression IS the correct thing to do honestly. I am glad consumers are starting to remove liabilities off their balance sheets for the cyclical recession phase coming up.
The FED is lowering rates-that is historically a bad sign for the economy. Others who borrow and play the casinos with the cheaper money(private and hedges) may run the stock market up
I paid down debt when the card with the high limit and no interest for x months my banks were handing out were done.
Recall the (appropriate) shit fit about Biden forgiving student loans?
Apparently it is cool to do so once again:
“A news release published July 29, 2025, on the Department of Homeland Security (DHS) website listed “student loan repayment and forgiveness options” as part of its ‘robust package of federal law enforcement incentives,’ which also included ‘a maximum $50,000 signing bonus’ and ‘enhanced retirement benefits.’”
ICE offers employees student loan repayment options? | Snopes.com
It’s one thing to offer a signing bonus for needed positions. It’s another to just hand out money Willy-nilly.
They have run out of MAGA Thugs to staff trumps SS squads?
Who Da Thunk?
>>>
Handing out college forgiveness as a bonus to guys doing a job a high school dropout could do, while keeping the yoke on potential scientists and researchers. Sounds like a plan to me.
Americans won’t stop spending until the last spigot of credit is turned off.
Wells fargo just started to add 15 dollar charge to checking accts. Usually they do that when banking profits are low. And that means times are tuff
Time to consolidate to become Too Big To Fail:
“Oct 6 (Reuters) – U.S. regional banks are ramping up mergers, fueled by expectations of a lighter regulatory approach under the Trump administration…”
On Monday, in the biggest U.S. bank deal this year, Fifth Third Bancorp agreed to buy regional lender Comerica in an all-stock deal for $10.9 billion, creating the ninth-largest lender in the country.
US regional bank mergers gain momentum under Trump administration | Reuters
Kick em when they’re down …
Wells Fargo sucks on every level.
U.S. Consumers Are Collapsing: Cars, Credit, & the Chaos Ahead
https://youtu.be/Qd7akdDtPXA?si=lbwn5iymS9XshGu5
And the more Americans I talk to the more some segments dislike AI. My Small Sample…
Working age adults and younger adults (Gen X, Millenials and some GenZ’s seem to love it as they are using it for work and it is simplifying their workload.
Dr’s are worried because people are replying to their questions with AI prepared responses that do not help at all.
Boomers are mixed with a bias toward serious dislike. But some use it and are not threatened.
Gen Alpha really do not like it, but they use it. (I only talked to 4 Alphas about it.)
Lotsa comments indicating it was a massive bubble for investors and had less to do with the mainstream worker that called it fake (goop), but I probably biased that toward my personal sentiment.
I try to filter out what I want to hear, but that ain’t easy!