Rising inflation may also be pushing consumers to take on more debt as they turn to credit to cover higher day-to-day expenses
[WASHINGTON] US consumer borrowing rose in July by the most in three months, led by the strongest gain in credit-card balances this year.
Total credit outstanding climbed US$16 billion after a revised US$9.6 billion gain in June, Federal Reserve data showed on Monday (Sep 8). The median projection in a Bloomberg survey of economists called for a US$10.4 billion rise.
Revolving debt, which includes credit cards, jumped US$10.5 billion. Non-revolving credit, such as loans for autos and education, increased US$5.5 billion. Mortgages are not included in the report.
The pickup in borrowing coincides with stronger household spending in July, partly reflecting increased sales at online retailers and furniture stores. In addition, auto sales in July climbed to a three-month high, according to Wards Automotive Group data.
At the same time, there are some signs of financial stress, with borrowing costs still elevated and wage growth moderating. Rising inflation may also be pushing consumers to take on more debt as they turn to credit to cover higher day-to-day expenses.
The share of US consumer debt in serious delinquency rose in the second quarter to the highest level since early 2020, as millions of Americans ignore their student loan bills. BLOOMBERG
