U.S. con­sumer bor­row­ing up $20.5 bil­lion in Oc­to­ber

The Trentonian (Trenton, NJ) - - BUSINESS -

WASHINGTON » Amer­i­can con­sumers in­creased their bor­row­ing by $20.5 bil­lion in Oc­to­ber. It was the big­gest gain in 11 months and re­flected strong in­creases in the use of credit cards and in auto and stu­dent loans.

The Oc­to­ber fol­lowed a $19.2 bil­lion gain in Septem­ber and was the best show­ing since Novem­ber 2016, the Fed­eral Re­serve re­ported Thurs­day.

The cat­e­gory that cov­ers auto loans and stu­dent loans was up $12.2 bil­lion, slightly slower than the $13.2 bil­lion rise in Septem­ber. Bor­row­ing in the cat­e­gory that cov­ers credit cards rose by $8.3 bil­lion, up from a $6 bil­lion in­crease in Septem­ber and the strong­est show­ing since Novem­ber.

The solid gains were good signs for strength in con­sumer spend­ing head­ing into the hol­i­day shop­ping sea­son. Con­sumer spend­ing ac­counts for 70 per­cent of eco­nomic ac­tiv­ity.

Re­ports from the re­tail­ers have in­di­cated a strong start to the hol­i­day sea­son with shop­pers buy­ing more than last year.

The U.S. econ­omy, as mea­sured by the gross do­mes­tic prod­uct, grew at a healthy rate of 3.3 per­cent in the July-Septem­ber quar­ter af­ter a 3.1 per­cent rate in the spring. It marked the first back-to­back quar­terly gains above 3 per­cent in three years.

The over­all gain in bor­row­ing pushed con­sumer credit to a new record of $3.8 tril­lion.

ELISE AMENDOLA — THE AS­SO­CI­ATED PRESS FILE

Amer­i­can con­sumers in­creased their bor­row­ing by $20.5 bil­lion in Oc­to­ber.

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