Consumer Borrowing Accelerated in July as Credit-Card Borrowing Rose
Consumer borrowing accelerated in July as Americans took on more credit-card debt and other loans
Total outstanding consumer credit, excluding loans secured by real estate like home mortgages, rose at a seasonally adjusted annual rate of 9.7% in July from the prior month to $3.238 trillion, the Federal Reserve said Monday. That was up from growth of Outstanding revolving credit, mostly credit-card debt, rose at a 7.4% pace in July to $880.54 billion, the fastest growth rate since April. Outstanding nonrevolving credit, a category that includes car and student loans, rose at a 10.6% rate to $2.357 trillion, its fastest monthly pace since February 2013
Consumer spending generates more than two-thirds of U.S. economic output. A surge in spending on durable goods like automobiles boosted economic growth during the second quarter, and stronger consumption fueled in part by borrowing could lead to stronger overall growth in the second half of the year
“We interpret the positive readings in the revolving consumer credit data to indicate that consumers’ sense of job and income security are strengthening, which would make them more comfortable pulling out their credit cards for purchases,” Credit Suisse economist Dana Saporta said in a note to clients
But oddly, July’s jump in credit-card borrowing wasn’t accompanied by a spike in household spending. Sales at retailers and restaurants were flat from June, and overall consumer spending fell 0.1% in July, according to the Commerce Department
Initial estimates for consumer spending and credit could be revised in the coming
Consumer borrowing accelerated in July as Americans took on more credit-card debt and other loans
Total outstanding consumer credit, excluding loans secured by real estate like home mortgages, rose at a seasonally adjusted annual rate of 9.7% in July from the prior month to $3.238 trillion, the Federal Reserve said Monday. That was up from growth of Outstanding revolving credit, mostly credit-card debt, rose at a 7.4% pace in July to $880.54 billion, the fastest growth rate since April. Outstanding nonrevolving credit, a category that includes car and student loans, rose at a 10.6% rate to $2.357 trillion, its fastest monthly pace since February 2013
Consumer spending generates more than two-thirds of U.S. economic output. A surge in spending on durable goods like automobiles boosted economic growth during the second quarter, and stronger consumption fueled in part by borrowing could lead to stronger overall growth in the second half of the year
“We interpret the positive readings in the revolving consumer credit data to indicate that consumers’ sense of job and income security are strengthening, which would make them more comfortable pulling out their credit cards for purchases,” Credit Suisse economist Dana Saporta said in a note to clients
But oddly, July’s jump in credit-card borrowing wasn’t accompanied by a spike in household spending. Sales at retailers and restaurants were flat from June, and overall consumer spending fell 0.1% in July, according to the Commerce Department
Initial estimates for consumer spending and credit could be revised in the coming
Source/ http://blogs.wsj.com
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