Zero Hedge: The American consumer is making a triumphal return.
After several months of subdued increases in consumer credit, moments ago the Fed reported that in May, total consumer credit surged by the most on record, soaring by $35.28 billion, nearly double the consensus estimate of $18 billion and sharply higher from last months’ $20.04 billion. The monthly increase was a whopping 10% SAAR, pushing the total to a new record high of $4.279 trillion.
“For the Lord your God will bless you just as He promised you; you shall lend to many nations, but you shall not borrow; you shall reign over many nations, but they shall not reign over you.” Deut. 15:6
What was behind the surge? Well, one month after we noted a surprising dip in credit card usage in April, in May Americans went all out, and splurged, pushing revolving credit, i.e., credit card debt, higher by a whopping $9.2 billion, the biggest monthly increase since December 2019, and pushing total revolving debt to $974.6 billion.
In light of this indiscriminate desire to “charge it”, one can’t really blame Wells Fargo for doing away with lines of credit: just give Americans credit cards and charge them a juicy 20% APR on all future purchases. Read More