Americans took out $3.9 billion more in consumer credit than they paid off in May, 10 times the amount incurred only a month earlier, the government said Monday.
The Federal Reserve said consumer credit increased at a seasonally adjusted annual rate of 6.5%, up from the previous month's 0.6% growth rate. Net new debt in April totaled $390 million.
It was the highest annual rate of increase since a 7.5% rate in October, when Americans borrowed $4.4 billion more than they paid off.
The May increase was concentrated in credit card debt, which rose $3.1 billion--an annual rate of 18.5%.
Consumers, who account for about two-thirds of U.S. economic activity, had appeared to be more cautious in their borrowing and spending in recent months.
Analysts had attributed the slower pace to high interest rates, waning confidence because of adverse economic news and the high level of debt already held by many Americans.
The annualized rate of credit growth for the first five months of 1990 was 3%, down from 7.6% for all of 1989 and 8.5% for 1988.
At the same time, Americans' savings rate--savings as a percentage of disposable income--has been above 6% for several months after dropping to a low of 3.2% for all of 1987.
Gilbert Benz, an economist with Swiss Bank Corp. in New York, said varying methods of computing economic statistics are used by different government agencies and occasionally produce different results.