NEW YORK – United States consumer debt increased by the most in five months in April and topped estimates, suggesting more upbeat sentiment among Americans is supporting borrowing and spending.
Total credit expanded $17.5 billion from the prior month to $4.1 trillion following an upwardly revised $11 billion gain in March, Federal Reserve figures showed Friday. Revolving debt outstanding increased the most since November while non-revolving credit rose the least since June.
Steady borrowing adds to other recent data showing the solid jobs market is buoying consumer spending, even as President Donald Trump’s trade policies add to economic uncertainty. Consumption is helping pull the U.S. economy toward its longest-ever expansion in July. The labor market, long underpinning the economic expansion, stumbled in May with a 75,000 payroll gain that missed all estimates. Wage gains were also less than forecast. Revolving credit outstanding, which includes credit card debt, increased $7 billion after a $2 billion drop, showing consumers felt more comfortable taking on debt. Non-revolving debt outstanding was up $10.5 billion after a $13 billion rise. Such debt includes loans for school and autos.
Credit expanded at an annual rate of 5.2% in April, after growing 3.3% the prior month. Economists surveyed by Bloomberg had projected the credit gauge would rise by $13 billion. Lending by the federal government, which is mainly for student loans, rose by almost $1 billion before seasonal adjustment. The consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.
Reade Pickert and Katia Dmitrieva is a reporter for Bloomberg News.