U.S. consumer borrowing hit another record in June, which The Associated Press reports is good news for the American economy.
Americans piled on another $20.7 billion in debt in June, bringing total consumer borrowing to a record $3.42 trillion, the Federal Reserve announced today. In June, borrowing in the category that includes auto and student loans rose by $15.2 billion. Borrowing in the category that includes credit cards rose by $5.5 billion.
The Fed’s monthly report on credit does not cover home mortgages or other loans secured by real estate such as home equity loans. Economists expect consumers to borrow and spend more the rest of the year. That would boost growth in a country where consumer spending accounts for nearly 70% of economic activity.
The American economy grew at annual rate of 0.6% from January to March and 2.3% from April through June. Economists expect growth to pick up to about a 3% pace the second half of the year.
Consumers are drawing confidence from an improving job market. The Labor Department announced today that U.S. employers added 215,000 jobs in July and unemployment remained at a seven-year low of 5.3%. Over the past year, consumer borrowing is up 6.5%. Borrowing rose 7.7% in the student and auto loan category and 3.5% in the credit card category.
During and after the 2007-2009 Great Recession, Americans scaled back their borrowing. Consumer borrowing hit bottom at less than $2.52 trillion in July 2010 and has been climbing more or less steadily ever since.
