WASHINGTON (AP) — U.S. consumer borrowing jumped by a record amount in September, driven higher by big gains in borrowing for auto and student loans.
The Federal Reserve said Friday that consumer borrowing increased $28.9 billion, the largest one-month increase on record going back to 1941. It followed a gain of $16 billion in August and pushed total consumer borrowing to an all-time high of $3.5 trillion.
The big September gain reflected a $22.2 billion increase in the category that covers auto loans and student loans and a $6.7 billion increase in credit card borrowing. It was the biggest increase in auto and student loans since July 2011.
Economists believe consumer spending, which accounts for 70 percent of economic activity, will remain strong in coming months. A healthy labor market is helping give consumers confidence to spend and finance part of their purchases by taking on more debt.
The Labor Department reported earlier Friday that the economy created 271,000 jobs in September, the most this year, pushing the unemployment rate down to a seven-year low of 5 percent.
Economists are looking for a strong consumer sector to help offset soft spots in other parts of the economy.
The overall economy, as measured by the gross domestic product, grew at a lackluster annual rate of 1.5 percent in the July-September quarter, less than half the 3.9 percent rate turned in during the April-June period.
Part of that weakness reflected global economic weakness, which is causing problems for American manufacturers. However, economists are forecasting that growth will rebound in the final three months of this year to around 2.5 percent, with the revival fueled in large part by consumer spending.