Consumer Borrowing in U.S. Surged in June by Most on Record
(Bloomberg) -- U.S. consumer borrowing surged in June by the most on record, reflecting large increases in credit-card balances and non-revolving loans.
Total credit jumped $37.7 billion from the prior month after an upwardly revised $36.7 billion gain in May, Federal Reserve figures showed Friday. On an annualized basis, borrowing increased 10.6%. The June gain exceeded all but one estimate in a Bloomberg survey which had a median projection of $23 billion.
Revolving credit outstanding, which includes credit cards, climbed $17.9 billion -- the second-largest increase on record. Non-revolving credit, which includes auto and school loans, rose $19.8 billion.
The broader reopening of the economy has allowed Americans to go out and spend on services such as meals out and travel, activities that were largely curbed during the height of the pandemic. What’s more, vehicle sales remained elevated in June.
In the second quarter, outstanding loans for motor vehicle purchases rose $40.7 billion from the previous three months, the Fed’s data showed. Loans for education climbed $4.1 billion.
Total consumer credit outstanding increased an annualized 8.8% in the second quarter. The Fed’s report doesn’t track debt secured by real estate, such as home mortgages.
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