U.S. consumer credit rises above expectations in May

U.S. consumer credit recording the largest rise of the year thus far in May. Consumer credit increased USD 18.4 billion in the month. Meanwhile, the weak print of April was also revised up, but consumer lending continued to gradually slowdown on a year-on-year basis.

The month-on-month rise was led by a rebound in revolving credit, which rose USD 7.4 billion. This was the biggest rise in revolving credit this year and the second biggest since June 2016. Consumer credit growth has decelerated a bit lately. Revolving credit growth has stalled on a year-on-year basis, and nonrevolving credit continues to slowdown very gradually.

May’s release also contained data on interest rates for several forms of consumer borrowing. Interest rates rose modestly higher, for instance, the interest rate on a 48-month new car loan rose 15 basis points from the first quarter to 4.67 percent in May.

Interest rates have moved higher since May, which might create a headwind at the margin for consumers. According to a Wells Fargo research report, a tight labor market and solid consumer sentiment should help counteract the drag.

At 22:00 GMT the FxWirePro's Hourly Strength Index US Dollar was neutral at 28.4229. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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