US Consumer borrowings rise 3.6% in July; declines in credit card spending persist
by SOURAV D | VIEW 1939
Consumer borrowing, a critical indicator to the health of an economy, gathers steam in July in the United States and accelerates further that followed a robust upsurge in June, remarking the index’s second straight monthly gain after the pandemic hobble had drowned the borrowings sharply in March, April and May.
In point of fact, US Federal Reserve reported in a statement on Tuesday that the US consumer borrowings had been picked up 3.6 per cent in July, reflecting a $12.2 billion in advance pay-offs, while July’s gain followed a 3.3 per cent rise in June that came against the backdrop of a sweeping decline between March and May, at the peak of pandemic outbreak in the United States.
Aside from that, breaking down the advance pay-outs in debts, the US Fed was quoted saying at its Tuesday statement that a strident surge in July consumer borrowing was largely catapulted by a $12.5 billion rise in a category that involved auto loans and student loans, however, the US Fed’s consumer borrowing tranche that tracks expenses in credit cards dropped $293 million in July, remarking a fifth straight month of decline in credit card spending.
A modest rebound in credit card spending on the cards, say analyst
In factuality, as the US Consumer borrowings which have been a closely observed indicator to probe consumers’ willingness to add more expenses in debts in order to support their spending accountable for roughly two-thirds of entire US economic activity, appeared to have accelerated further in July, adding that a decent recovery in credit card spending would likely to emerge in a near-term outlook, a senior economist in Oxford Economics, Nancy Vanden Houten said following the release of July consumer borrowings data, “A slow recovery in consumer spending and tight lending standards could limit the upside for credit card gains. ”