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Consumer borrowing in US increased more than forecast in June
[WASHINGTON] American consumer borrowing rose more than forecast in June on bigger credit-card balances and a pickup in lending for automobiles.
The US$20.7 billion increase in total credit followed a revised US$16.5 billion gain in the prior month, Federal Reserve figures showed Friday. The advance pushed borrowing up at a seven per cent rate in the second quarter, the fastest in a year.
Job gains and an improvement in household balance sheets since the last recession are making Americans more comfortable about using credit cards and taking out loans for big-ticket goods such as new cars. The pickup in June borrowing points to sustained consumer spending that will help bolster the economy in the second half of 2015.
The median forecast of 30 economists surveyed by Bloomberg called for a US$17 billion rise in credit after a previously reported US$16.1 billion advance in May.
The Fed's consumer credit 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 US$5.5 billion in June, the second-biggest advance since April 2014, after climbing US$1.6 billion the prior month.
Non-revolving debt, such as that for college tuition and the purchase of vehicles and mobile homes, rose US$15.2 billion, the most in three months, after increasing US$14.9 billion.
Loans to buy cars climbed by US$22.1 billion in the second quarter, before adjusting for seasonal variations, while lending to consumers by the federal government for education rose US$1 billion.
Another report Friday showed employers in the US added 215,000 jobs in July as the unemployment rate held at a seven- year low of 5.3 per cent.