Consumer Credit Has Second Highest Monthly Increase In Two Years

As if predicting the jump in interest rates in June, consumers took advantage of cheap credit conditions two months ago to load up on debt, pushing the May Consumer Credit higher by $19.6 billion, well above expectations of a $12.5 billion jump. This was the second highest sequential jump post the consumer credit data set revision, only second to the $19.9 billion from last May. And just like a year ago, revolving credit jumped by $6.6 billion following months of stagnating levels. It did the same in May 2012 when it rose by $6.8 billion when consumers also appeared to be prepaying summer purchases. The balance of credit expansion was once again driven by a surge in student and car loans, which amounted to $13 billion of the total May increase. Whether this credit growth continues into June is skeptical following the jump in interest, and especially following the doubling of the prevailing subsidized Stafford Loan rate which will likely cripple future student loan extraction.

As for the big picture, or where the bulk of this "credit" has come from, the story remains the same. It's all government, all the time as the following chart from @not_jim_cramer confirms.