Consumer credit increased in May by the most in a year, a sign low borrowing costs were boosting economic growth although interest rates have since risen.
Total consumer installment credit advanced by $19.6 billion to $2.8 trillion. Economists
polled by Reuters had expected consumer credit to risk $12.5 billion during the month.
Consumer debts grew both for nonrevolving credit, which includes loans for cars and
college as well as for revolving facilities such as credit cards.
Analysts expressed worries that a rapid rise in interest rates could deal a blow to the
economy's recovery from the 2007-09 recession.
Yet despite an increase in interest rates on many kinds of loans in May, non-revolving
credit increased $13 billion during the month. Some analysts had expected a strong
reading in that category because other reports showed strong vehicle sales during the
month. Revolving credit jumped by $6.6 billion in May. Borrowing costs, however,
have continued to rise.
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Sheila McKinney
