American consumers pulled out their credit cards to make purchases in October far less than economists had forecast, data from the Federal Reserve showed Tuesday.
Revolving credit, mostly credit cards, expanded by $6.6 billion, or 7.8 percent. That’s a slowdown from September’s $9.8 billion, 11.7 percent, rise.
This indicates that credit expansion played a smaller role in the economy than analysts were expecting. It could be a sign that households balked at the high prices for many goods and services in a month when inflation rose at the fastest rate in four decades. It’s likely the Delta variant also slowed spending, particularly in the services sector.
Overall consumer credit, which excludes mortgage debt, increased $16.9 billion in October, down from a $27.8 billion gain in September. Economists had been expecting a $30 billion gain, according to Econoday. That’s an annual growth rate of 4.7 percent in October, down from a 7.7 percent gain in the prior month.
Nonrevolving credit, mostly comprised of auto and student loans, rose 3.7 percent after a 6.5 percent growth rate in September.
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