US consumer borrowing growth up $22.1 billion in November

WASHINGTON — Americans slowed their pace of borrowing slightly in November, but it still grew by a robust $22.1 billion. Solid auto and student loans offset some of the decline in the category that covers credit cards.

The Federal Reserve said Tuesday that November’s figure follows a $25 billion gain in October, which had been the biggest increase in 11 months. Economists had been forecasting more of a slowdown.

Consumer borrowing is closely watched for signs that households are still willing to take on new debt to finance purchases. Consumer spending accounts for 70 per cent of total economic activity.

Borrowing for auto and student loans rose $17.4 billion in November, up from a gain of $15.6 billion in October.

Borrowing in the category that covers credit cards slowed to a $4.8 billion increase, down from the $9.3 billion advance seen in October. The November credit card gain was the smallest since borrowing in this category had fallen slightly in September.

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The overall November figure represented a 6.7 per cent increase on a seasonally adjusted basis following a 7.6 per cent rise in October. Consumer debt measured in the Fed’s monthly report rose to a new record of $3.98 trillion.

The overall economy grew at strong annual rates of 4.2 per cent in the second quarter and 3.4 per cent in the July-September quarter, propelled by strong consumer spending. Growth is expected to slow a bit to an annual rate of around 2.5 per cent in the October-December quarter. That would still be enough to push growth for all of 2018 to around 3 per cent, one of the best showings in years.

The Fed’s monthly report on consumer borrowing does not include home mortgages or other loans backed by real estate.

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Martin Crutsinger, The Associated Press