U.S. consumer borrowing climbs on bigger credit card balances
U.S. consumer debt climbed in May at about the same pace as a month earlier, led by the largest advance in revolving debt outstanding since October, suggesting Americans' favorable economic outlook is underpinning continued spending.
Total credit rose $17.1 billion from the prior month, in line with the median estimate of economists, following a $17.5 billion gain in April, Federal Reserve figures showed Monday. While credit card and other revolving debt outstanding increased at a faster rate, nonrevolving credit posted the smallest increase in almost a year.
The gain in borrowing underscores positive consumer sentiment, backed by a robust labor market and elevated wage growth, with consumption helping propel the U.S. economic expansion to the longest on record.
The jobs market continues to support borrowing and the financial wherewithal of consumers: Employers added 224,000 jobs in June, more than any economist forecast, after a sluggish May. While pay gains have been cooling, the job additions point to more workers being pulled in from the sidelines, boding well for future months.
Revolving credit outstanding, which includes credit card debt, increased $7.2 billion after a $7 billion advance.
Nonrevolving debt outstanding climbed $9.9 billion, the least since June 2018, after rising $10.5 billion. Such debt includes loans for school and automobiles.
Credit expanded at an annual rate of 5 percent in May, after growing 5.2 percent the month prior.
Economists surveyed by Bloomberg had projected the credit outstanding would rise by $17 billion.
Lending by the federal government, which is mainly for student loans, increased by $5.1 billion before seasonal adjustment.
The consumer credit report doesn't track debt secured by real estate, such as home equity lines of credit and home mortgages.