Consumer Borrowing Reaches Highest Increase Since Last Fall
7/12/2017 8:56:00 PM
Borrowing in May also represents a surge in credit card balances, student loans and auto loans compared to marginal increases in April.
Consumer borrowing tracked by the Federal Reserve increased by $18.4 billion in May, which is the highest amount in several months.
According to the Fed’s latest Consumer Credit Report, consumer borrowing for credit cards, student loans and auto loans increased at a seasonally adjusted rate of 5.75 percent. Revolving credit, including only credit cards, increased by $7.3 billion, and nonrevolving credit for auto loans and student loans increased by $11.1 billion, according to the report.
Revolving credit increased at an annual rate of 8.75 percent and nonrevolving credit increased at an annual rate of 4.75 percent.
MarketWatch reports economists predicted a $13.5 billion increase in total consumer credit for May.
“It must come as a relief to the Fed given the softening in auto lending and credit card usage,” said Robert Frick, corporate economist at Navy Federal Credit Union, in the MarketWatch article.
And, according to U.S. News & World Report, May’s increase is the strongest since the $25.1 billion uptick in consumer borrowing in November.
Revised numbers for April in the Fed’s report show revolving credit increased by just $1.2 billion and nonrevolving credit increased by $11.7 billion. Revised numbers for total outstanding credit in May show a $12.9 billion increase, according to the Fed’s report.
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