US consumer borrowing climbs to new record in August

AP News
|
Posted: Oct 07, 2015 3:09 PM

WASHINGTON (AP) — U.S. consumer borrowing advanced at a solid pace in August, as Americans took out more auto and student loans.

The Federal Reserve said Wednesday that consumer borrowing rose by $16 billion in August, pushing the total to a fresh record of $3.47 trillion.

The August advance was slightly below the July gain of $18.9 billion. In June, credit had soared by $27.2 billion, the largest increase since November 2001.

Borrowing for car and student loans expanded by $12 billion in August. Borrowing in the category that covers credit cards rose by $4 billion.

Economists are forecasting that consumer spending, which accounts for 70 percent of economic activity, will remain strong in the coming months as households remain willing to take on more debt.

A strong consumer sector will help to offset weakness in other parts of the economy. Manufacturing and export sales have been hurt by increased weakness overseas and a higher dollar, which makes U.S. products less competitive on foreign markets.

Recommended
FBI, You Don’t Have That Right
Bruce Bialosky

The overall economy, as measured by the gross domestic product, expanded at a robust rate of 3.9 percent in the April-June quarter. But many economists believe growth slowed sharply in the July-September quarter to perhaps as low as 1.5 percent, reflecting the impact of a lackluster global economy.