Con­sumer bor­row­ing rose in Septem­ber

Daily Local News (West Chester, PA) - - WEATHER -

WASHINGTON >> Amer­i­can con­sumers boosted their bor­row­ing in Septem­ber, a po­ten­tial sign that re­cent job growth and wage gains have left them slightly more com­fort­able with hold­ing debt.

The Fed­eral Re­serve said Mon­day that to­tal con­sumer bor­row­ing rose $19.3 bil­lion in Septem­ber to $3.7 tril­lion out­stand­ing. Con­sumer debt has climbed at an an­nual pace of 6.3 per­cent, slightly be­low the growth rates seen in 2014 and 2015.

Re­volv­ing credit, which cov­ers credit cards, posted an an­nual gain of 5.2 per­cent to $978.8 bil­lion. The non-re­volv­ing cat­e­gory, which in­cludes auto and stu­dent loans and makes up the bulk of con­sumer debt, has risen 6.7 per­cent over the past year to $2.7 tril­lion.

Roughly 70 per­cent of U.S. eco­nomic ac­tiv­ity comes from con­sumers, so the in­crease in bor­row­ing sug­gests that spend­ing will keep aid­ing growth.

The econ­omy ex­panded at an an­nual pace of 2.9 per­cent dur­ing the third quar­ter, its health­i­est growth rate in two years. The trou­bled ex­port sec­tor re­cov­ered and com­pa­nies started to re­stock their shelves in an­tic­i­pa­tion of greater con­sumer de­mand.

Much of the op­ti­mism has come from con­sis­tently solid hir­ing.

Em­ploy­ers added 161,000 jobs in Oc­to­ber, a steady pace that con­trib­uted to av­er­age hourly earn­ings ac­cel­er­at­ing 2.8 per­cent in the past year.

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