Consumer Borrowing in U.S. Increased $20.5 Billion in AprilShobhana Chandra
Consumer borrowing in the U.S. rose more than forecast in April, boosted by the biggest increase in revolving credit in a year.
The $20.5 billion advance in total borrowing followed a $21.3 billion gain in the prior month that was larger than previously estimated, Federal Reserve figures showed Friday in Washington. Non-revolving credit, which includes student and automobile loans, increased at a slower pace.
The report signals Americans are becoming more willing to use their credit cards and borrow for large-ticket purchases as interest rates stay low and rising home and stock values bolster household finances. An improving job market also will sustain growth in consumer spending, which accounts for almost 70 percent of the economy.
The median forecast of 33 economists surveyed by Bloomberg called for a $16 billion rise in consumer borrowing. Estimates ranged from gains of $15 billion to $24 billion after a previously reported March advance of $20.5 billion.
The Fed’s report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.
Revolving debt, which includes credit cards, rose by $8.6 billion in April after a $4.9 billion advance.
Non-revolving debt, such as that for college tuition and the purchase of vehicles and mobile homes, climbed $11.9 billion, the smallest gain since November 2013.
Lending by the federal government, which is mainly for student loans, rose by $1.6 billion before adjusting for seasonal variations.
A Labor Department report earlier on Friday showed payrolls rose more than forecast in May. The 280,000 increase, the most in five months, was accompanied by a pickup in wage growth.
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