Economy

Economic Data Roundup (07/10/2017)

7/10/17 3:30 PM

iStock-92397008.jpgThe latest report from the Federal Reserve Board of Governors on Americans’ borrowing activity, released late this afternoon, showed that total U.S. consumer credit outstanding jumped by $18.4 billion in May (lagged release) to $3,842.6 billion. That was the largest monthly increase since November and much better than the $14.3 billion gain economists had expected. Non-revolving credit, e.g. student and automobile loans, rose by $11.0 billion in May, the 69th monthly increase in a row. Revolving credit, which is mostly consumers’ credit cards, lifted by $7.4 billion in May, the largest sequential gain in half a year.

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However, consumer credit growth on a year-over-year basis continued to slow in May, falling to the weakest reading since September 2012. At the same time, the personal saving rate, i.e. personal saving as a percentage of disposable personal income, has jumped in this country by a full percentage point this year. The uptick in saving, along with the recent slowdown in revolving credit growth, suggest that despite the post-election spike in consumer sentiment and continued strength in the U.S. labor market, Americans have generally become a lot more cautious with their money. That helps explain why real personal consumption (consumer spending) grew in Q1 at the slowest annual rate since 2009. Officials at the Federal Reserve, though, have said that they believe such weakness is transitory, and many analysts expect to see a significant rebound in growth in subsequent quarters.

 


 

Sources: Econoday, FRBG, FRBSL

Post author: Charles Couch