WASHINGTON (7/9/14)--Total outstanding consumer credit climbed $19.6 billion in May, according to Federal Reserve data released Tuesday, a number that falls short of expectations, but still points to building consumer confidence, especially in making big-ticket purchases.
Within credit unions, nonrevolving credit, which is associated with purchasing larger items such as automobiles and homes, drove the gains, climbing to $236.5 billion from $232 billion in April.
Revolving credit, tied largely to credit cards, inched up to $42.8 billion from $42.2 billion in April for credit unions.
"Extremely low interest rates and easier access to credit are enticing consumers to finance large purchases such as education and vehicles," said Moody's analyst Andrew Davis (Economy.com July 8).
The rise in total outstanding consumer credit in May falls far behind April's $26.1 billion surge and sits below the average increase over the last three months of $21.8 billion.
Further, revolving credit balances overall only gained $1.8 billion in May after an $8.8 billion boom in April.
"Revolving balances decelerated as consumers remain hesitant to take on higher-interest debt," Davis said. "It is encouraging that this segment added $1.8 billion in May, but the pace will have to pick up considerably to make up for the sluggish growth that has persisted throughout the recovery."