Consumer confidence is showing signs of growth, thanks to a record spike in lending in May. The most recent U.S. consumer lending report highlights huge growth in both revolving – and non-revolving – lines of credit, following a decline from the previous month.
Federal Reserve Report Highlights Big Jump in Credit Lending
U.S. consumers are making the most of the ending of many coronavirus restrictions with record levels of new credit. According to the most recent Federal Reserve data, Americans opened a record amount of new credit, nearly doubling April’s tally.
Non-revolving credit saw the largest jump, with consumer borrowing jumping to $26.1 billion in May, the highest amount on record. Non-revolving credit includes any financing with a set loan end date. These credit accounts include auto and boat loans, mortgages, and student loans.
Revolving credit, including credit cards, rose by $9.2 billion in May. That consumer borrowing gain follows a decline in April. Overall, total credit rose $35.3 billion from April according to the Federal Reserve – a 10% climb on an annualized basis.
Goldman Sachs Study Shows Consumers Worry About Debt
The rise in consumer lending comes on the heels of a recent Goldman Sachs report that debt repayment was the number one financial concern among Americans. The quarterly Consumer Sentiment Study highlighted the concerns many have about debt. Many turn towards personal loans or new balance transfer credit cards to help pay down existing debt burdens.
The report also shows that most Americans (63% of respondents) believe that the next six months will see either good business conditions (27%) or stable business conditions (36%). The same study also shows that 84% of Americans think they will save the same or more during the next six months, indicating consumer confidence is continuing to grow.
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