Credit card, one hundred dollar banknotes and calculator, isolated on white background.

Credit card, one hundred dollar banknotes and calculator, isolated on white background.

U.S. Consumer Credit Picks Up in June

Lifestyle and Budget Dow Jones Newswires

Americans took on consumer debt at a faster pace in June, suggesting a firming labor market and low gas prices may finally be prying open consumers' wallets.

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Outstanding consumer credit, a reflection of nonmortgage debt, rose $20.74 billion or at a 7.3% annual rate in June, the Federal Reserve said Friday. That's a slight increase from May, when it increased at an upwardly revised annual rate of 5.9%, but less than April's 7.6% pace.

Economists surveyed by The Wall Street Journal had expected a $17 billion increase in June.

Revolving credit, mostly credit cards, rose at a 7.4% annual rate, a jump from May when it rose at an annual rate of 2.1%.

Nonrevolving credit, made up largely of auto and student loans, rose at a 7.3% annual rate, a slight acceleration from May's upwardly revised rate of 7.2% and April's unrevised 6.2% growth pace.

U.S. employers added 215,000 nonfarm jobs in July, the Labor Department reported on Friday. Gross domestic product, the broadest measure of economic output, grew at a seasonally adjusted annualized rate of 2.3% in the second quarter.

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But some economists still question whether Americans will pick up their spending at a time of stagnant wages, despite nearly five straight years of job growth. Consumer spending accounts for more than two-thirds of U.S. economic output, serving as an important driver of economic growth.