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Consumer credit surges at CUs: Fed report

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WASHINGTON (6/9/14)--Overall outstanding consumer credit at credit unions spiked in April, climbing to $275 billion from $269.9 billion in March--the largest leap since the middle of last year--according to the Federal Reserve's consumer credit report, released Friday. 

While revolving loans, consisting mostly of credit card use, remained relatively flat for credit unions, nonrevolving credit--more associated with financing big-ticket items--swelled by $4.8 billion month-to-month to $232.7 billion.

Across all lending institutions in the United States, demand for credit rose by $26.8 billion in April, which is the largest step up since December 2010. The majority of the increase was driven by an $18 billion climb in nonrevolving balances, mirroring the trend for credit unions.

Revolving credit balances also recorded a post-recession high with an $8.8 billion jump.

"Improvement in the job market, house prices and stocks have consumers feeling more confident," said Andrew Davis, Moody's analyst ( Economy.com June 6). "In turn, consumers are taking advantage of extremely low interest rates and easier access to credit to finance big-ticket items such as education and vehicles."

Jobs climb again in May; unemployment stuck at 6.3%

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WASHINGTON (6/9/14)--The economy added 217,000 workers in May, a pull-back from April's strong gain of 282,000 jobs, but still another marker of a growing labor market during a year averaging 200,000 new jobs every month, according to numbers released by the Labor Department last week.

Despite the steady climb, however, the unemployment rate did not flinch and stands at 6.3%.

The Labor Department also reported last week a jump of about 8,000 unemployment insurance claims, but despite the increase claims remain low overall ( Economy.com June 5).

"Pretty much right on the head with all forecasts," said Christopher Vecchio, DailyFX.com currency analyst ( MarketWatch June 6). "A solid report all around. Not overtly positive, but still positive."

The latest rise in employment pushes the economy back over its pre-recession peak from January 2008, though questions still remain about the quality of jobs being added.

The gains were driven by three industries, business/professional services, education/healthcare and leisure/hospitality, and "while the first two create many quality jobs, leisure/hospitality jobs are among the lowest paying," said Moody's analysts.

Further, while the economy may have added enough jobs to meet its pre-recession peak, in order to accommodate the number of workers who have joined the market since then, it would require almost a doubling of the recent numbers.   

Meanwhile, average hourly pay for workers inched up by 0.15%, or a 2.39% improvement year-over-year, and the average number of hours per work week remained at 33.7 for hourly workers, and 34.5 for all workers.