U.S. : Consumer credit up $14.6 billion, slowest in 3 months.

CONSUMER borrowing slowed in June to the smallest increase in three months as a jump in auto loans and ''Students Loans'' was offset by a big drop in borrowing on credit cards.

Overall consumer borrowing increased by $14.6 billion in June after a $17.8 advance in May, the  Federal Reserve reported Wednesday.

It was the smallest increase since $9.9 billion gain in March.

Auto and Students Loans rose by $14.7 billion, the biggest gain since December.

Borrowing in the category that covers credit cards fell by $80.5 million following a gain of $7.5 billion in May.

It was the third monthly decline in credit card category in the economy, as measured by the gross domestic product, slowed to growth at an annual rate of 2.1% in April-June quarter compared to 3.1% GDP, growth rate in the first quarter.

But consumer spending, which drives about 70% of economic activity, accelerated to a sizzling 4.3% growth rate in the second-quarter after a lackluster 1.1% annual gain in the January-March quarter.

Economists are looking for GDP growth to be around 2% in the second-half of this year as the consumer sector continues to perform well.

The June increase pushed consumer credit to a new record of $4.1 trillion.

The Fed's monthly credit report does not cover mortgages or any other debt secured by real estate such as home-equity loans. {Agencies]


Post a Comment

Grace A Comment!