Shoppers walk through the Menlo Park Mall in Edison, New Jersey, U.S. (Photographer: Michael Nagle/Bloomberg)

Consumer Credit in U.S. Jumps in May by Most in Six Months

(Bloomberg) -- U.S. consumer debt rose in May by the most in six months on more credit-card debt outstanding and non-revolving loans, Federal Reserve figures showed Monday.

Highlights of Consumer Credit (May)

  • Total credit increased $24.6b (est. up $12b) and prior month revised up to $10.3b gain (prev. $9.3b)
  • Revolving credit outstanding climbed $9.8b m/m, after a $1.1b rise in April
  • Non-revolving debt outstanding rose $14.8b m/m after $9.2b increase

Key Takeaways

The increase in revolving debt, which includes credit cards, shows consumers were spending more freely midway through the second quarter. After slowing in March to recoup from a debt- laden fourth-quarter, households picked up the pace of credit in consecutive months.

The rise in non-revolving debt, which includes educational and auto loans, partly reflects steady motor-vehicle sales. The Fed’s consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.

The results signal a modest acceleration for second-quarter spending amid recent tax cuts and a robust labor market. Still, moderate wage gains may encourage households to be more conscious about taking on too much debt.

Other Details

  • Lending by the federal government, which is mainly for student loans, rose by $4.1 billion in May, before seasonal adjustment
  • Credit increased at a seasonally adjusted annual rate of 7.6 percent after 3.2 percent in April

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