Aug 13, 2013 Walt Wojciechowski
Recently, the Federal Reserve released data revealing that while consumer credit grew by $13.8 billion in June, it was below the forecast amount of $15 billion.
According to The Washington Post, the downturn in consumer credit was nothing new. In fact, it represented a trend - since July 2008, credit card debt has dropped 16.5 percent, as more Americans are unwilling to take on the burden of paying down high interest rate credit cards. However, this year, shoppers have begun to increase use of the payment channel.
Factors that have made consumers uneasy over the use of credit cards include sequestration, which garnished some workers' wages and caused others to lose their jobs, and higher payroll taxes, the source reported.
"Ultimately, it will take a rise in wages to fuel consumer spending and borrowing and an economic recovery as a whole," Amy Traub, a senior policy analyst at Demos, told the news source.
Certain sectors experienced a strong month, though. Auto lending jumped in June, which many economists are calling a sign that the United States is beginning to emerge from the recession.