In a surprising result, the amount of consumer borrowing in July doubled what economists had predicted and rose by $12 billion.
The substantial raise follows an $11.3 billion jump in June, the Federal Reserve recently reported. Prior to the report's release, economists responding to a Bloomberg News survey had predicted a $6 billion increase. As a result of the monthly incline, the rise in non-revolving loans is the most on record since November 2001.
Revolving credit declined, however, falling by its largest amount in six months. A recent Bloomberg report stated the drop may be the result of Americans cutting back on non-essential items as the job market has slowed and wage growth has decreased.
"The softness in revolving credit is indicative of a cautious consumer," Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez in New York, told Bloomberg. As for the overall gain, "school loans are part of it, as is auto finance."
While the nation continues to struggle with home sales, job growth and declining consumer confidence, the major cities in Texas have performed well recently. With a significant amount of retail jobs being added in the region recently, residents may soon purchase more Houston properties, as interest rates for mortgages have also dropped to record lows.
Courtesy of 2M Realty News