WASHINGTON – Americans increased borrowing on their credit cards and for purchases such as autos in August, although the gain wasn’t as sizable as it was in July.
The Federal Reserve said Friday that consumer debt rose at an annual rate of 2.7 percent in August after climbing at a 3.6 percent rate in July.
The overall increase in debt of $4.88 billion was in line with private economists’ expectations. Consumer debt rose by $6.5 billion in July and a huge $14.96 billion in June.
Economists have been expecting consumer borrowing to slow, given that the savings rate has dipped to a record low. The savings rate was minus 0.7 percent in August, the third straight month it has been in negative territory, but an improvement from the all-time low for savings of minus 1.1 percent in July.
A negative savings rate means that Americans are spending all they earn in a given month, and even dipping into past savings or borrowing to finance spending above their earnings level.
Loans on credit cards and other types of revolving debt rose at an annual rate of 3.5 percent in August after falling at a 1.3 percent rate in the July.
The American Bankers Association reported last week that the percentage of credit card accounts 30 days or more past due rose to a record high of 4.81 percent in the April-to-June quarter.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
