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- Americans borrowed money at a brisk pace in May, a sign that consumers remained optimistic about the economy despite expectations of slowing growth.
- The US Federal Reserve announced Monday that consumer credit, which measures the outstanding amount of non-mortgage debt, has risen from about 5% to $ 4.1 billion in May.
- A sustained pace of credit growth may indicate a positive outlook for consumer spending, which accounts for more than two-thirds of economic activity.
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Americans borrowed money at a brisk pace in May, a sign that consumers remained optimistic about the economy despite expectations of slowing growth.
The US Federal Reserve announced Monday that consumer credit, which measures the stock of non-mortgage debt, has risen by about 5% to reach $ 4.1 billion in May. The pace was slightly lower than the 5.2% recorded the previous month.
The good rise in credit levels may reflect the optimistic outlook for the economy and consumer spending, which account for more than two-thirds of business activity. Retail sales rose for a third consecutive month in May, as economists clouded their growth prospects in the US and elsewhere.
Nevertheless, according to the Federal Reserve, a growing number of credit card balances have flown to a serious crime scene in recent years. A record number of Americans also have car loans past due for at least 90 days.
"The large and growing number of troubled borrowers suggests that not all Americans have benefited from the strength of the labor market and warrant ongoing monitoring and badysis of this sector," wrote economists Andrew Haughwout, Donghoon Lee. Joelle Scally and Wilbert van der Klaauw. report back in March.
However, the cost of servicing the debt remains historically low, with the debt service ratio for consumer credit at 5.66 in the first quarter.
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