U.S. con­sumer bor­row­ing climbed 7.73% in Oct. from a year ago

The Trentonian (Trenton, NJ) - - BUSINESS - By Josh Boak

WASHINGTON >> Amer­i­cans boosted their bor­row­ing by 7.73% in Oc­to­ber from a year ago, the largest in­crease in nearly a year as con­sumer spend­ing has helped fuel U.S. eco­nomic growth.

The Fed­eral Re­serve said Fri­day that con­sumer bor­row­ing rose by a sea­son­ally ad­justed $25.3 bil­lion in Oc­to­ber to a total of $3.96 tril­lion. The Oc­to­ber in­crease was the most since Novem­ber 2017 and more than dou­ble the gain in the prior month.

Much of the in­crease was due a 10.75% jump in re­volv­ing credit, a cat­e­gory that in­cludes credit cards. Non-re­volv­ing credit — which in­cludes auto loans and stu­dent debt — rose 6.67%.

Economists and in­vestors mon­i­tor con­sumer bor­row­ing to judge the will­ing­ness of peo­ple to take on debt to fi­nance their pur­chases. Higher debt can sug­gest that peo­ple are con­fi­dent in their abil­ity to re­pay their loans.

Con­sumer spend­ing ac­counts for 70 per­cent of eco­nomic ac­tiv­ity. The econ­omy grew at an an­nual pace of 3.5 per­cent in the July-Septem­ber quar­ter, aided by the big­gest surge in con­sumer spend­ing in four years.

Many Amer­i­cans have rea­sons to be con­fi­dent de­spite the re­cent stock mar­ket de­clines. The un­em­ploy­ment rate has held at 3.7 per­cent, the low­est rate in nearly a half-cen­tury.

The Fed’s con­sumer bor­row­ing re­port does not cover home mort­gages or other types of debt se­cured by real estate such as home eq­uity loans.

MATT ROURKE — THE AS­SO­CI­ATED PRESS FILE

Amer­i­cans boosted their bor­row­ing by 7.73% in Oc­to­ber from a year ago, the largest in­crease in nearly a year.

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