The numbers: Total consumer credit rose $9.1 billion in September, compared with a decline of $15.8 billion the previous month, the Federal Reserve said Tuesday. That translates to a 2.2% gain year-over-year, compared to a 3.8% decline in the previous month.
Economists had expected an increase of $9.5 billion, according to the Wall Street Journal forecast.
Important information: Revolving credit, like credit cards, slowed to a 2.9% increase after rising 13.7% the previous month.
Non-revolving credit, typically auto and student loans, rose 1.9% after an unusual decline of 9.8% the previous month. This credit category is generally much less volatile. The August decline was due to the small part of the White House’s student loan forgiveness plan that was not blocked by the Supreme Court ruling, economists said.
The Fed’s figures do not include mortgage loans, the largest category of household debt.
Big picture: Economists note that it is becoming more expensive to borrow money as the Fed has raised interest rates and banks have tightened standards. As a result, consumers are expected to be more reluctant to use credit cards.
A separate study from the New York Fed shows that credit card delinquencies are increasing, with the sharpest increase among borrowers between the ages of 30 and 39.
Market response: DJIA SPX shares were higher in late trading on Tuesday, while the 10-year Treasury bond BX:TMUBMUSD10Y fell seven basis points to 4.57%.