Consumer borrowing picked up in June, latest Fed data show
The numbers: That translates into a 4.3% annual rate. Credit growth rose at a revised 2.3% gain in June, higher than the initial estimate of a 1.3% gain.Key... The numbers: That translates into a 4.3% annual rate. Credit growth rose at a revised 2.3% gain in June, higher than the initial estimate of a 1.3% gain.Key details: All of the gain came in nonrevolving credit, typically auto and student loans. This borrowing rose 6% in June, up sharply from a 0.3% growth rate in the prior month.
Revolving credit, such as credit cards, fell 0.6% in June after an 8.1% gain in the prior month. This is the first decline since April 2021.A vibrant labor market has supported consumer spending this year. But economists are watching carefully. There is a sense that any excess savings from the pandemic is dwindling.
On top of this, banks reported to the Fed that they expect to tighten loan terms for the remainder of the year. They see sluggish demand for new loans.Market reaction: Stocks DJIA SPX were higher on Monday. The yield on the 10-year Treasury note BX:TMUBMUSD10Y rose to 4.08%.
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