US consumer credit grows at record pace in June
WASHINGTON, Aug.6 (Reuters) – U.S. consumer credit grew at the fastest rate on record in June, as Americans increased their use of credit cards to boost consumer spending in the second quarter, showed Friday Federal Reserve data.
Total consumer credit grew at a rate of $ 37.69 billion, the fastest rate on record, and followed an increase of $ 36.69 billion in May, the U.S. central bank said. Economists polled by Reuters expected consumer credit to rise at a rate of $ 23.00 billion in June.
An alternative measure that tracks the monthly change in the total amount of outstanding credit has increased the most since December 2010, the data shows. The metric showed revolving credit, which primarily measures credit card usage, rose $ 17.858 billion, the largest gain since 2006, after climbing $ 9.089 billion in May.
June’s hike may explain the continued robustness of consumer spending in the last quarter, even as the flow of stimulus money from the government tapered off.
“We expect consumer credit growth to continue at a strong pace in the second half of 2021, supported by strong consumer spending and an easing of lending standards for consumer loans,” said Nancy Vanden Houten, chief economist at Oxford Economics in New York.
Consumer spending, which accounts for more than two-thirds of US economic activity, posted a second consecutive quarter of double-digit growth. This helped push the level of gross domestic product above its peak in the fourth quarter of 2019.
But growth in non-revolving credit, which includes auto loans as well as government-issued student loans, slowed to a rate of $ 19.831 billion from a rate of $ 27.601 billion in May.
Reporting by Lucia Mutikani; Editing by Dan Burns and Paul Simao