Consumer Borrowing Increased in July 2011
Posted by | Posted on 26-09-2011
Non-revolving
The Federal Reserve’s definition of non-revolving credit includes student, auto, boats, and personal and mobile home loans. For this report, debt secured by real estate such as residential mortgages and home equity lines of credit are not tracked. The increase in non-revolving debt was mostly federal government debt from student loans. There was a slight increase in car borrowing, which increased from an annual rate of 11.41 million autos to 12.2 million.
Revolving
Revolving debt is 98%prised of credit cards. In July 2011, revolving credit had the largest decrease in six months. Consumer spending on retail sales in July was below themerce Department’s forecast.
Reasons for spending increase
Consumers are still cautious about spending.
Consumer confidence has fallen in recent months.
Consumers are more pessimistic about economic conditions and their own financial future.
Many consumers still have high debt.
Many college tuition are due in July.
According to Federal Reserve Chairman, Ben S. Bernan
