Economy

Revolving Credit Balances Rise 5 Pct In May

loan

The debt balances climb ever higher.

In the latest data reported by the Federal Reserve, total credit was up $17.1 billion in May as measured month over month.

Drilling down a bit, the numbers show that revolving debt was up at the fastest pace since October of last year and Bloomberg reported that credit card and other revolving debt posted gains that outpaced non-revolving debt.

One tailwind would be a favorable economic outlook, reported the newswire. The $17.1 billion matched expectations, and follows a $17.5 billion rise in April.

Overall revolving credit, including credit card debt, was up $7 billion, an increase of 5 percent measured on an annual pace. The pace of non-revolving debt was, as measured on a dollar basis, up $9.9 billion, a slowdown from $10.5 billion in the prior month. Such non-revolving debt includes student loans and auto loans, among other borrowings.

Total consumer debt outstanding at the end of May was $4.1 trillion, and includes only non-mortgage debt. It should be noted that the most recent 5 percent annualized gain was a bit slower than the 5.2 percent measured in the previous month.

In the data released on Monday (July 8), total revolving debt was up 8 percent in May, to $1 trillion, and in the line item denoting credit card balances, the balance at the end of the most recent month was $15.1 trillion.

The increased consumer credit balances come against a backdrop where retail sales were up over three months, and where the Commerce Department said last month that retail sales were up 0.5 percent in May. In that report, April sales were revised upwards, gaining 0.3 percent rather than dropping 0.2 percent as had been reported.

The retail sales number for May excludes autos, gasoline, building materials sales and food services. The retail sales gains remained resilient even as home sales were down in April. In one number that might hint at a continued sanguine outlook — for spending at least — the U.S. added 224,000 jobs in June.

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