By Martin Crutsinger, AP Economics Writer
WASHINGTON (AP) — Consumer borrowing increased at a solid pace in August, helped by the biggest jump in auto and student loans in three years.
Total credit rose $17.9 billion after a $23 billion increase in July, the Federal Reserve reported Monday.
The August strength came from a $19.8 billion increase in the category that covers auto and student loans. It was the biggest monthly advance since August 2016.
That strong gain offset a $1.9 billion drop in the category that covers credit cards.
Consumer borrowing is closely watched for signs it can provide about the strength of consumer spending.
The economy has been slowing this year due to headwinds from a cooling in global growth and President Donald Trump’s trade war with China, both of which have harmed American manufacturers.
But so far strong consumer spending has been able to cushion the economy against adverse shocks. Economists believe spending will remain strong for the rest of this year, aided by the lowest unemployment in a half-century, which boosts income growth.
The consumer borrowing report showed that the $1.9 billion drop in credit card use in August was that category’s weakest performance since a $2.8 billion decline in March.
The August changes left total U.S. consumer borrowing at a new high of $4.14 trillion.
The Fed’s monthly credit report does not cover home mortgages or other loans secured by real estate, such as home equity loans.
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Source: The Village Reporter