Americans are taking credit cards again and taking more car loans.

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Number: In May, Americans withdrew their credit cards and borrowed most of the money in five years, reflecting growing optimism about the economic recovery and consumers’ greater willingness to spend.

The total volume of consumer lending in May increased by 10%, or by $ 35 billion. The Federal Reserve said Thursday. This is the largest increase since March 2016.

Consumer credit has grown at a slow but steady pace since last fall, but the easing of the coronavirus pandemic has allowed US states to lift most of the restrictions. The economy responded with faster growth and most companies tried to hire more workers. This added optimism.

According to the Wall Street Journal forecast, economists were expecting an increase of $ 18 billion.

Big picture: Households tend to use more credit when the economy is doing well and people feel they have a reliable job.

At the same time, the cost of many goods and services has risen sharply this year due to a sharp increase in deferred demand.

For example, used car prices have jumped to record heights and many popular resorts across the country are booked. These are just a few examples.

And yet, the use of credit is not much higher than a year ago. It exceeded the pre-crisis level only in March. What’s more, savings rates are still quite high, thanks in part to federal stimulus money paid to most Americans.

Last year, loan use fell for the first time since the last recession in 2009.

Key details: Revolving loans, like credit cards, grew by 11.4%.

Non-revolving loans, usually car loans and student loans, also rose 9.5%. This loan category is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth.

The Fed’s report does not include mortgages, the largest category of household debt.

Market reaction: Dow Jones Industrial Average
DJIA,
-0.75%

and the S&P 500 fell sharply in trading on Thursday.

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