Americans increased their borrowing in June at a much faster pace than expected, with the rise led by higher credit card debt.
The Federal Reserve reported Monday that consumer borrowing rose at an annual rate of 5.7 percent in June, up sharply from a 3.3 percent increase in May.
The June advance reflected a rise in consumer debt of $10.27 billion at an annual rate, much larger than the $3.7 billion increase economists had been expecting.
Analysts are expecting consumer borrowing to slow in coming months, reflecting the slowdown that has already occurred in consumer spending.
For June, borrowing on revolving credit — the category that includes credit card debt — rose at an annual rate of 9.8 percent, following an even bigger 11 percent gain in May.
Borrowing for auto loans and other types of non-revolving credit rose at an annual rate of 3.2 percent in June after having fallen at an annual rate of 1.4 percent in May.
Consumer spending, which accounts for two-thirds of the total economy, slowed abruptly in the April-June quarter, pushing overall growth down to an annual rate of 2.5 percent, far below the 5.6 percent growth rate in the first three months of this year.
Analysts are predicting that growth for the rest of the year will hover around the 2.5 percent level as consumers struggle to cope with higher interest rates, soaring energy prices and a cooling housing market.
The increase in borrowing in June pushed total consumer credit to a record annual rate of $2.19 trillion. The Fed’s measure of consumer credit does not include mortgages or other loans that are secured by real estate.