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Bank credit growth slows again in July, but consumer credit is officially in contraction

Consumer debt is down sharply because consumers have been borrowing less and have been paying down lots of debt. Since March, consumers have been borrowing between $20 and $15 billion CAD each month, but they’ve been paying down between $20 and $25 billion CAD each month at the same time. In July, we see that consumer credit issuance is down over 11% from the same time last year, but credit destroyed (or paid down) is down only 8%.

We’re seeing a similar thing happen in the business credit market. Businesses are borrowing less and have substantially increased their debt repayments. In July, credit issuance was down over 5% from the same time last year, but credit destroyed up is over 20%! If this trend continues, the bank business credit market will be in contraction before the of the year. This will have profound implications for the labor market.

Finally, all

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Continue Reading Bank credit growth slows again in July, but consumer credit is officially in contraction