WASHINGTON -- Consumer borrowing posted a hefty increase in May, reflecting the biggest jump in credit card debt in six months.
The Federal Reserve reported yesterday that consumer credit rose at an annual rate of 6.4 percent in May, far above the small 1.1 percent gain of April.
The increase was propelled by a surge in the category that includes credit cards, which rose at a rate of 9.8 percent in May after having a tiny increase of 0.2 percent in April. The jump in credit card debt was the largest since a 14.5 percent rate of increase in November.
The category of consumer credit that includes auto loans was also up in May, rising at a 4.4 percent rate after a 1.7 percent gain in April.
The size of the increase was nearly double what economists had forecast.
David Wyss, the chief economist at Standard & Poor's in New York, said some of the surge in credit card debt reflects the fact that it is getting harder to get home equity loans with banks tightening standards and home values not soaring as they did during the housing boom.
Wyss said another factor was a strong gain in retail sales in May, which shot up by 1.4 percent, the largest jump in more than a year.
The overall economy, weighed down by a slump in housing, grew at a lackluster rate of 0.7 percent in the January-to-March quarter.