Federal Reserve Shows US Consumer Borrowing Rose To $3.47 Trillion In August
According to new Federal Reserve data, in August, US consumer borrowing climbed by $16 billion from July to a new record of $3.47 trillion. The AP reported that August’s increase was slightly less than the increases of $18.9 billion in July and $27.2 billion in June. The boost from May to June was the biggest monthly gain since November 2001. For the month of August, the Fed data showed borrowing for student loans and cars rose by $12 billion, while borrowing for credit cards and similar accounts rose by $4 billion. Bloomberg News reported that types of non-revolving debt, like funding for student loans and autos, rose by the lowest amount since November 2013. However, consumers are showing “a greater willingness to finance other purchases with credit cards, pointing to steady growth in spending as the job market improves.” A Bloomberg survey of 33 economists expected borrowing to increase in August by $19.5 billion.
What This Means For Small Businesses
The AP reported that economists project consumer spending, which comprises 70% of US economic activity, will continue to be “strong in the coming months as households remain willing to take on more debt.” The strength of this consumer spending “will help to offset weakness in other parts of the economy” such as lower export sales and decreased manufacturing jobs. Overall, the latest data is encouraging for small businesses, as it means consumers are interested in spending more and are gaining increased access to funds to use for these purchases.
Additional Reading
The Wall Street Journal also covered the Fed’s consumer debt data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.