US Consumer Borrowing Soared by $25.8 Billion in August
The Federal Reserve on Friday released its preliminary report on consumer credit for the month of August 2016. On a seasonally adjusted basis, consumer credit rose 8.5% in the month, up from 5.9% growth posted in July. In dollar terms,…
The Federal Reserve on Friday released its preliminary report on consumer credit for the month of August 2016. On a seasonally adjusted basis, consumer credit rose 8.5% in the month, up from 5.9% growth posted in July.
In dollar terms, consumer credit rose by $25.8 billion month over month. Analysts had been expecting an increase of $16.6 billion.
Total consumer debt rose to $3.687 trillion in August of which $974.6 billion is revolving (mostly credit card) debt and $2.712 trillion is non-revolving debt. Revolving debt rose by $5.6 billion (7%) and non-revolving debt rose by $20.2 billion (9%). Revolving credit comprises primarily credit card balances and non-revolving credit includes motor vehicle loans, student loans, among others, and may be secured or unsecured. Mortgage debt is not included in the report.
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The largest holders of consumer debt are depositary institutions which hold about $1.473 trillion in debt, including certain types of student loans. The federal government holds about $1.024 trillion in total debt, all of which is non-revolving and includes certain kinds of student loans. Finance companies and credit unions are also large holders of non-revolving debt, with August totals of about $670.9 billion and $369.6 billion, respectively.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
