Buyers borrow more at year-end

December total a record $3.55T

WASHINGTON — U.S. consumers in December increased their borrowing at the fastest pace in three months. The result suggests that consumer spending should remain strong in the coming months.

Borrowing expanded $21.3 billion in December, the strongest showing since an increase of $28.6 billion in September, the Federal Reserve reported Friday. That pushed total borrowing to a fresh record of $3.55 trillion.

Borrowing in the category that covers credit cards rose $ 5.8 billion, slightly below the November gain. Borrowing in the category that covers auto and student loans jumped $15.4 billion in December, notably higher than the November gain of $7.7 billion.

Consumer spending, which accounts for 70 percent of economic activity, is expected to accelerate this quarter after slowing in late 2015.

The overall economy grew at an annual rate of 0.7 percent in the October-December period as consumer spending slowed to a growth rate of 2.2 percent.

Economists are looking for further gains in employment to bolster spending in the current quarter.

Households may be more willing to carry larger creditcard balances and take out car loans amid persistent job growth that is showing signs of fueling bigger wage gains. For all of last year, consumer credit outstanding rose 6.9 percent.

In its monthly credit report, the Fed does not break down auto loans and student loans in the seasonally adjusted data. The report excludes borrowing that is backed by real estate such as mortgage loans and home equity loans.

The median forecast of 30 economists surveyed by Bloomberg called for a $16 billion increase in total borrowing, with estimates ranging from gains of $10 billion to $25 billion.

Consumer confidence cooled in the final week of January as American households tempered their views about the economy and their

finances.

The Bloomberg Consumer Comfort Index eased to 44.2 in the period ended Jan. 31 from a three-month high of 44.6. Last week marked just the second decline since the end of November for the sentiment gauge, which is holding above the 2015 average.

The fewest respondents in a month said the economy was getting better, while a drop in stock prices led to dimmer views of personal finances.

At the same time, the gauge of the buying climate improved as gasoline prices dropped to a seven-year low.

“We are not seeing an improvement, but we are not seeing any deterioration, which is positive given the conditions we are seeing,” said Gary Langer, president of New York-based Langer Research Associates LLC, which compiles the data for Bloomberg. “Consumers are somewhat cautious in their outlook.”