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The numbers: Americans increased their use of credit in June at the fastest rate in 10 years in a show of confidence for the U.S. economy before the delta strain of the coronavirus emerged.
Total consumer credit leaped by 10.6% annual rate, or $30 billion, in June, the Federal Reserve said Friday. That’s the biggest increase since the summer of 2011.
Revolving credit, like credit cards, increased by a whopping 22% annual pace in June. The last time the use of credit rose so sharply was in 1998.
Americans are spending and borrowing more this year owing to a strong rebound in the economy. They are buying more cars, taking more vacations and doing lots of things they couldn’t during the pandemic.
Read: Consumers boost spending and spearhead U.S. economic recovery
Also: U.S. economy tops pre-COVID level as GDP surges at 6.5% pace
Yet even as Americans rely more on credit, they still have plenty of savings they built up during the pandemic. The savings rate in June was still above pre-pandemic levels, a separate government report showed.
So far a rising number of coronavirus cases tied to the more contagious delta strain doesn’t appear to have hurt the economy much, but it could take a bigger bite if cases continue to grow. Some states have already reimposed mask mandates or even required certain businesses to require customer to show vaccine cards.
Read: The coronavirus delta variant hasn’t stunted the economy so far. Here’s why
Nonrevolving credit, typically auto and student loans, climbed 11.3%. This category of credit is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth.
The Fed report does not include mortgage loans — the largest category of household debt.
The U.S. stock market reacted little to the report. The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Friday trades after a strong employment report for July.
