(Bloomberg) -- U.S. consumer debt climbed in May at about thesame pace as a month earlier, led by the largest advance inrevolving debt outstanding since October, suggesting Americans'favorable economic outlook is underpinning continued spending.
Total credit rose $17.1 billion from the prior month, in linewith the median estimate of economists, following a $17.5billion gain in April, Federal Reserve figures showed Monday.While credit card and other revolving debt outstanding increasedat a faster rate, non-revolving credit posted the smallestincrease in almost a year.
Key Insights
- 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.
- Non-revolving debt outstanding climbed $9.9 billion, the least since June 2018, after rising $10.5 billion. Such debt includes loans for school and automobiles.
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- Credit expanded at an annual rate of 5% in May, after growing 5.2% 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.
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