Outstanding U.S. consumer debt rose at an annual rate of 5.9% in August, pushed higher mostly by a hefty gain in credit-card debt, the Federal Reserve reported Friday.
The overall increase of $12.2 billion was the highest since May, the Fed reported. It pushed total outstanding consumer credit to $2.47 trillion in August, up from $2.46 trillion in July.
Outstanding consumer credit rose by an upwardly revised 4.7% in July. It was originally estimated to rise by 3.7%.
August’s data captures the impact of turmoil in financial markets that month, noted Ryan Sweet of Moody’s Economy.com. “They provide further evidence that consumers did not pack it in following the events,” he wrote in an email.
Revolving debt such as credit cards was the biggest driver behind the overall rise in August, the data show. That debt climbed by 8.1% in August, or by $6.1 billion.
This is from the Wall Street Journal…..
Despite potential tax and investment consequences, more individuals have been borrowing from their 401(k) plans or taking hardship withdrawals in recent months, some retirement-plan providers say.
Not all plans have seen jumps, and more-comprehensive statistics won’t be available until next year. But a number of plan providers that follow month-to-month patterns, including T. Rowe Price Group Inc., Hewitt Associates and Hartford Financial Services Group Inc., have seen a small but noticeable uptick.
Many in the field expect more 401(k) borrowing in 2008 as consumers struggle with tighter credit and potentially higher mortgage payments.