Consumer borrowing rises, led by more auto and student loans

Business

This Sunday, Aug. 11, 2019, photo shows credit cards in New Orleans. On Thursday, Nov. 7, the Federal Reserve releases its August report on consumer borrowing for September. (AP Photo/Jenny Kane)

WASHINGTON (AP) — Consumer borrowing rose in September at a modest pace, driven by more student and auto loans, though a category that mostly includes credit cards fell for the second straight month.

The Federal Reserve said Thursday that overall consumer borrowing increased 2.8% to $4.15 trillion. A category that covers student and auto loans rose 4.2%, while credit card debt fell 1.2%.

Americans are spending at a solid pace but in recent months have relied less on borrowing. Steady, if modest, income growth has enabled consumers to shop more while also stepping up saving. A separate government report last week showed that spending rose in September, but incomes increased more, lifting the savings rate to 8.3%, the highest in six months.

Consumer borrowing is closely watched for signs about the strength of consumer spending.

The economy has slowed this year as global growth has weakened and President Donald Trump’s trade war with China has raised costs for U.S. businesses and dragged down U.S. exports. Businesses have cut back on their spending on computers, machinery and other equipment.

The U.S. economy expanded at just a 1.9% annual rate in the July-September quarter, down from as much as 3.1% in the first three months of the year.

Still, healthy consumer spending has kept the economy afloat, as Americans’ economic outlook remains optimistic, thanks in part to steady hiring and an ultra-low unemployment rate of 3.6%.

The Fed’s monthly credit report does not cover home mortgages or other loans secured by real estate, such as home equity loans.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Recent Videos

Gunman Threatens Teens During Anti-Gun Violence March

Thumbnail for the video titled "Gunman Threatens Teens During Anti-Gun Violence March"

Military photo mystery

Thumbnail for the video titled "Military photo mystery"

Baby Boom! Missouri Sheriff's Office welcomes 17 babies

Thumbnail for the video titled "Baby Boom! Missouri Sheriff's Office welcomes 17 babies"

"The Best Moment Of My Life!" Good Samaritan rescues lost toddler

Thumbnail for the video titled ""The Best Moment Of My Life!" Good Samaritan rescues lost toddler"

Target offering discount for military families

Thumbnail for the video titled "Target offering discount for military families"

Federal offices closed for Veterans Day

Thumbnail for the video titled "Federal offices closed for Veterans Day"

Birthdays Anniversary 11-11-19

Thumbnail for the video titled "Birthdays Anniversary 11-11-19"

Two dead in crash with butane tank

Thumbnail for the video titled "Two dead in crash with butane tank"

Fantasy of Lights: Volunteers light up Hardin lawn

Thumbnail for the video titled "Fantasy of Lights: Volunteers light up Hardin lawn"

Veterans Day Ceremonies

Thumbnail for the video titled "Veterans Day Ceremonies"

Texoma Christian Care Center mail call

Thumbnail for the video titled "Texoma Christian Care Center mail call"

Holiday cards for troops

Thumbnail for the video titled "Holiday cards for troops"