U.S. Consumer Credit Makes Surprise Jump in June

by Patrick Lunsford, CollectionIndustry.com

The Federal Reserve reported Monday that U.S. consumer credit took a surprising leap in June on the strength of increased credit card spending.

Overall consumer credit rose at a rate of 5.7% in June, or by $10.3 billion total. Revolving debt — such as credit cards ? increased by $6.65 billion in the month. The numbers far exceeded analysts? expectations.

Most analysts had anticipated consumer credit to expand by about $4 billion in June. Not only did the actual numbers more than double expectations, but May?s numbers were revised up to $5.88 billion from the previously-announced $4.4 billion figure. The total two month gain is the largest in nearly two years.

Economists expected consumer spending to slow down throughout the summer, especially in revolving debt. But credit card debt increased at an annual rate of 9.8% in June after posting an 11% increase in May.

Non-revolving debt ? such as car loans ? increased 3.2% in June after declining 1.4 in May.

Total U.S. consumer credit ? not including mortgages ? now stands at $2.19 trillion.