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American consumers layered on another $40.1 billion in debt last month, up 10.5 percent year on year, compared to May’s addition of $23.8 billion, or a 6.3-percent annual rate, according to a new U.S. Federal Reserve report.
Revolving debt, mainly credit card balances, grew 7.8 percent in May and more than doubled to 16 percent in June, year over year.
Non-revolving debt, such as car loans, expanded by 5.5 percent in May and 8.8 percent in June.
These figures exclude mortgage loans.
In this year’s second quarter, Americans borrowed $98.9 billion more than in the first three months, the Fed found. The Federal Reserve Bank of New York calculated the total as slightly higher, at $103 billion, the biggest quarterly jump since 2016.
TRENDPOST: Household savings swelled during the COVID War when people had far fewer opportunities to spend.
As the virus eased, people began spending again, as we reported in “Consumer Spending Rebounds. What Next?” (22 Feb 2022) and other articles.
As inflation raged on, people kept spending, eventually swapping saving for spending, which we noted in “U.S. Consumers Keep On Spending as Savings Rate Plummets” (31 May 2022).
Unable to help themselves, consumers more recently began tapping those fattened savings accounts to keep buying, a shift we highlighted in “Americans: Spending More, Saving Less” (7 Jun 2022).