US Borrowing on the Rise
As the United States continues on it’s recovery from recession it hit an event of note yesterday as new data showed the first quarterly rise in consumer borrowing since 2008.
The Federal Reserve released data which showed that there was a rise in consumer debt for the final quarter of 2011 at an annualised rate of 0.3 per cent. This was the first time since the second quarter of 2008 that there had been such a rise. Business lending also saw positive movement with an increase at an annualised rate of 4.6%, again the highest movement since 2008.
The growth of credit shows the progress consumers have made in reducing debts left behind by the recession, as well as healing in the banking system. Stronger credit growth should support consumption and make the economic recovery more resilient.
The positive news is a strong indication of the progress made by consumers on the debts that they had accrued before and during the recession, and the efforts they had gone through to reduce them. It is also an indication of US banks bringing themselves back into order. Further growth should aid in further improving the debt recovery and aiding in the recovery of the US economy.