Consumer Borrowing Increase to a Thirteen Year High
Signalling towards a recovering economy the consumer borrowing increased in July by the greatest amount in the last thirteen years. The figures released by the Federal Reserve showed an amplified consumer borrowing on credit cards as well as loans taken for automobiles and colleges in July.
The data indicates that consumer credit, which excludes loans taken by the real estate sector signals that the consumers are taking loan at the fastest pace from the time when the financial crisis ended six years back.
On Monday the Federal Reserve said, in July the outstanding consumer credit excluding the mortgages, spiked by $26 billion at a seasonally adjusted rate. This is the maximum noted since 2001 November.
Student as well as auto loans, along with some others, that comes under the non-revolving debt increased by $20.6 billion. The credit in total increased 9.7 percent at an annual rate following a 7.1 percent rise in June.
However the figures give a mixed image for consumer spending in the last few weeks. A vigorous jump in credit typically point to the fact that the consumers are not being too cautious about spending, which in turn will support a greater economic development.
However all data does not give a rosy picture. Last month the government had said that in July the overall spending dropped in the last six months.
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