Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

US Consumer Borrowing Jumps by More Than $40 Billion, Second-Most Ever

Published 08/05/2022, 03:23 PM
Updated 08/05/2022, 03:36 PM
© Bloomberg. A customer inserts a credit card into Square Inc. device while making a payment in San Francisco, California. Photographer: David Paul Morris/Bloomberg

© Bloomberg. A customer inserts a credit card into Square Inc. device while making a payment in San Francisco, California. Photographer: David Paul Morris/Bloomberg

(Bloomberg) -- US consumer borrowing surged in June, reflecting a jump in credit-card balances and a record increase in non-revolving lending that includes auto and school loans. 

Total credit increased $40.2 billion from the prior month, second only to March’s $47.1 billion spike, Federal Reserve figures showed Friday. The median forecast in a Bloomberg survey of economists called for a $27 billion advance. The figures aren’t adjusted for inflation.

Revolving credit outstanding, which includes credit cards, increased $14.8 billion. Non-revolving credit increased $25.4 billion.

The June figures wrap up a quarter in which borrowing rose an annualized 8.7%. Motor vehicle loans at the end of the second quarter increased about $32 billion, while student loans was up less than $1 billion.

With inflation at a 40-year high, Americans are having to spend more to buy the same goods and services as before. Consumers, however, have so far proved resilient, with outlays growing on an inflation-adjusted basis in June -- even if just slightly.

That’s certainly not true of all workers though. The rapid price gains have left others struggling to pay their bills. A Census Bureau survey conducted in late June and early July found four in 10 adults said it has been somewhat or very difficult to cover usual household expenses.

(Adds graphic)

©2022 Bloomberg L.P.

© Bloomberg. A customer inserts a credit card into Square Inc. device while making a payment in San Francisco, California. Photographer: David Paul Morris/Bloomberg

Latest comments

Many think they better borrow now before rates go up even more, others are,borrowing while they are able before they go underwater.  Banks you better have good reserves as the ship sinks, or do you think you're too big to fail this time?  High government debt is not sustainable!
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.