American consumer borrowing increases again, marking the largest consecutive two-month increase since 2022.

Consumer borrowing in the United States saw another strong increase in April, marking the largest consecutive two-month growth since the end of 2022. Data released by the Federal Reserve on Friday showed that total outstanding consumer credit increased by $20.7 billion in April, revised down from an increase of $22.2 billion in March. The median estimate from economists surveyed by the media was an increase of $17.7 billion. Non-revolving credit, such as auto loans and student loans, saw an increase of $9.1 billion in April. Revolving credit, including credit cards, saw an increase of $11.6 billion in outstanding balances. The report does not include mortgage loans. With rising gas prices putting a bigger squeeze on incomes, many Americans are facing additional financial pressures. Despite signs of strengthening in the labor market, wage growth is slowing down, which may lead some consumers to borrow or rely on savings to sustain their spending. For Americans carrying unpaid credit card balances, the high interest rates on these accounts can pose a significant financial burden. The latest available data shows that as of February, the average interest rate being charged on interest-bearing credit card accounts was 21.5%. Borrowers are also unlikely to see any relief in the near term. It is currently expected that the Federal Reserve will raise interest rates before the end of the year to address the inflation rebound driven by the war.