Credit crunch begins? Total consumer credit rose by lowest level since November 2020

Is the U.S. in the middle of a credit crunch?

The latest Federal Reserve G.19 data certainly suggests so.

In May, total consumer credit rose by just $7.24 billion, down from a downwardly revised $20.32 billion. This was also way below the market estimate of $20.25 billion.

Interestingly enough, this was the smallest monthly gain since November 2020.

Revolving credit (credit cards) slowed to $8.49 billion. Non-revolving credit (auto and student loans) tumbled by $1.25 billion, which was the first negative reading since April 2020.

So, with credit card interest rates above 22 percent — a record high — will next month’s report show a decline?

And, of course, how this will seep into the broader economy waits to be seen.