Consumers step up borrowing at healthy pace in May
WASHINGTON — U.S. consumers borrowed more on their credit cards in May and also took out more student and auto loans, a modest sign of economic health.
The Federal Reserve said Monday that consumer borrowing increased 5% that month, just below April’s 5.2% rise. Total outstanding consumer debt, which excludes mortgages, stood at nearly $4.1 trillion in May.
Steady increases in consumer borrowing echo other recent data showing that consumers remain confident in the economy and willing to spend. Retail sales rose for the third straight month in May. Consumer confidence, as measured by the Conference Board, a business research group, is at historically high levels, though it slipped in June.
Consumer credit is monitored by many economists because consumer spending powers about two-thirds of U.S. economic activity.
Still, the economy is expected to have slowed in the April-June quarter from the first three months of the year, economists forecast. Growth was likely about 1.5% to 2% at an annual rate, down from 3.1% in the first quarter.
Saudi carrier cancels troubled Boeing 737 order for Airbus
DUBAI, United Arab Emirates — Boeing’s campaign to restore the reputation of its best-selling plane after two deadly crashes suffered a blow with a Saudi airline canceling an order worth up to $5.9 billion in favor of a European rival of the U.S. manufacturer.
Flyadeal, the budget airline arm of Saudi Arabian Airlines Corp., ordered 30 A320neo jets from Airbus and took options on 20 more, meaning that its entire fleet will consist of planes from that company.
It’s a potentially troubling sign for Boeing, which has not seen customers divert orders to Airbus en masse.
Flyadeal did not mention Boeing in its weekend announcement and did not disclose financial terms of the Airbus order, although the list price of the planes is about $5.5 billion. Carriers rarely pay list prices.
Flyadeal said the Airbus agreement emerged from last month’s Paris Air Show.
South Korea’s Moon seeking solution to Japan trade spat
SEOUL, South Korea — South Korea’s president said Monday the country is committed to finding a diplomatic solution to a bitter dispute over tightened Japanese control of exports of high-tech materials used by South Korean companies to produce semiconductors and displays.
In a meeting with senior aides, President Moon Jae-in called for Japan to withdraw what he described as a politically motivated measure and for “sincere” bilateral discussions on the issue. He said South Korea would be left no choice but to take countermeasures if the Japanese trade controls damage South Korean companies.
Last week, Japan removed South Korea from a list of nations with which it minimally restricts trade and ordered a more stringent approval process for shipments of photoresist and other key chemicals to South Korea. The move came amid deteriorating relations between the countries over issues related to Japan’s brutal colonial rule of the Korean Peninsula before the end of World War II.
South Korea’s Trade Ministry has said Seoul plans to file a complaint with the World Trade Organization over the “unjust” Japanese action. The South Korean government sees the Japanese move as retaliation for recent South Korean court rulings ordering Japanese corporations to compensate South Korean plaintiffs for forced labor during World War II.
Japan’s export restrictions, which went into effect last Thursday, cover fluorinated polyimides, which are used in organic light-emitting diode (OLED) screens for TVs and smartphones, and photoresist and hydrogen fluoride, which are used for making semiconductors.