Sharp Slowdown in U.S. Consumer Credit Jolts Outlook

U.S. consumer credit growth slowed sharply in the latest reading, with total credit rising by $4.23 billion versus $9.24 billion previously, a drop of $5.01 billion or roughly 54%. The lower pace of borrowing signals a notable cooling in consumer leverage compared with the prior month’s expansion.

The $4.23 billion increase also came in well below analysts’ expectations of a $10.0 billion gain, undershooting forecasts by about $5.77 billion. Equity markets are likely to interpret the softer credit growth as a sign of more cautious consumer demand, pressuring consumer discretionary and retail names that rely on credit-fueled spending. Conversely, the data may ease concerns about overheating and support longer-duration growth and technology stocks through slightly lower-rate expectations, with the impact skewed toward medium-term policy sentiment rather than immediate trading flows.