Increase in US Consumer Spending

Consumer borrowing in the United States had its highest increase in three years during the month of July. At the top of the list is the rise in non-revolving credit which consists of student loans.

According to the Federal Reserve, the increase in credit amounts to $12 billion after an amended rise of $11.3 billion in the month of June. In a Bloomberg news survey, economists predict a gain of $6 billion. The growth in the number of non-revolving loans was the highest since the month of November back in 2001.

There is a huge decline in revolving credit. This shows that Americans may not be purchasing non-essential materials because of the lack of consumer confidence as the rate of employment stays low and income growth continuously declines. Increase in job availability and income may be needed to push household spending as well as recovery.

The gain in July was the highest since April of 2008 according to the figures of the Fed. The approximation of 32 economists in the Bloomberg survey stated that the gains will be at $1 billion to $17 billion after reporting a previous increase to $15.5 billion in June. The report of the Fed does not include debts taken by real estate which comprise of lines of credit for residential mortgages and home equity.

Economic Outlook
Chief Rupkey, Bank of Tokyo-Mitsubishi UFJ Ltd.’s chief financial economist said that the consumer is trapped in the middle of a hard position which is not beneficial for the economic outlook. The total credit increase showed a non-seasonally adjusted rise of to $385.7 billion from $15.6 billion in the borrowing category of the federal government including school loans. The unadjusted figures also reflected minimal increases in non-revolving borrowing at finance companies, commercial banks and credit unions which may show an improvement in vehicle sales in this month.

Americans increased car purchasing in July. The sales in vehicles rose to 12.2 million yearly for that month from 11.41 million according to the data of the industry.

In the economic survey of the Fed’s Beige Book, the economy is growing at a slower pace in several regions because shoppers are limiting their spending and factories are restricting production.

Enhanced by Zemanta
Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. Mortgage Rate Predictions For The Next Few Years In recent years, the housing market has been on a very bumpy financial ride. Due to the sub-prime mortgage crisis which resulted in millions of homeowners losing their homes due to the inability to pay their monthly mortgage payments, President Obama's mortgage refinance stimulus plan was implemented to help people...
  2. Student Loan Debt Taking Over Mortgages Credit Cards and Car Loans The Continuous Increase in Student Loans Americans are accumulating more debts for college payments. This is the case despite records showing that in the past three years, they have been cutting on other types of loans such as mortgages, credit cards…...
  3. Rising Mortgage Rates not a Cause for Alarm in the Housing Market Mortgage rates are increasing to its highest level but the rise is not enough to disrupt the strengthening market of U.S. homes. In February this year, a fixed rate mortgage for 30 years is estimated at 5.05%. This is the highest rate since…...
  4. Two-thirds of Past Due Mortgage Payments on Loans come from 2005 to 2007 Mortgage loans that were obtained between 2005 and 2007 account for almost two-thirds of delinquent balances said Equifax. Although there is a decrease in the number of past due accounts of at least 30 days, those for 60 and 90…...
  5. Loans Play Their Part In A Healthy Economy. Almost everyone in not only in the UK but throughout the civilized world except perhaps the most affluent people in society at some time or the other require a loan....

Tagged with: • • • • • • •

Filed under: News

Like this post? Subscribe to my RSS feed and get loads more!