May data shows a $182 million contraction in consumer credit, defying forecasts of a $17.5 billion increase amid higher tax refunds.
US consumer credit fell by $182 million in May, ending a six-month growth streak and missing economist forecasts of a $17.5 billion gain. The decline marks the first contraction since November 2024, driven by a drop in revolving credit, primarily credit card balances.
April had seen a $20.8 billion increase, while consensus expectations for May were set at $17.5 billion. Analysts attribute the unexpected pullback to higher tax refunds totaling up to $100 billion, which may have allowed consumers to pay down debt temporarily.
Individual bankruptcy filings rose 8% year-over-year in May, signaling financial strain rather than improved fiscal discipline. The data suggests consumer resilience may be weakening under record-high borrowing costs.