US Federal Reserve said in a statement late on Friday that the US consumer borrowings picked up in June following three straight months of declines, however, the key fundamentals remained half-spirited as credit card debts had further extended their downturns.
Besides, according to Govt. data published late on Friday, the US consumer borrowing, a critical indicator to US consumer spending and the health of the world’s No. 1 economy, had shot up 2.6 per cent to $8.95 billion last month that followed large declines in March, April and May, as a lion-share of the economy remained shut down due to the pandemic-driven forced business closures.
Nonetheless, as businesses reopened, US consumer borrowings reported a gain, but the category that covers the credit card debts had reported declines for the straight fourth month in a row, falling by 2.8 per cent to $2.3 billion compared to a month earlier, however, as the US economy had entered into a recession back in February this year and over 30 million or a tenth of United States’ entire population had been picking up an expanded unemployment benefit as of end-July, the US consumer borrowings category covering student loans and auto loans soared 4.3 per cent to $11.3 billion.
US Consumer borrowings gather momentum in June as economies reopen
In point of fact, June’s gain in US consumer borrowing came against the backdrop of a perilous plunge of $20.8 billion in March, $65.3 billion in April and $14.4 billion in May, as many analysts remained optimistic over a swift recovery of the US economy.
Nonetheless, contemplating a glimpse at the flipside of the coin, many economists, analysts and financial services providers remained fretted that the recent resurgence in pandemic outbreak in the United States would likely to lead to a steeper cutback in spending, while an impasse over another leg of trillion-dollar pandemic stimulus in the US Congress had added to further strains on US Consumer borrowings’ outlook over the coming months.
Federal Reserve Consumer borrowings report does not cover mortgage debts or real estate leveraged loans such as home equity debts.