Consumer spending slows in August
Friday, October 6th 2006, 2:33 pm
By: News On 6
WASHINGTON (AP) _ Consumer borrowing rose in August at the slowest pace in five months, reflecting weaker demand for auto loans.
The Federal Reserve reported Friday that consumer borrowing rose at an annual rate of 2.6 percent in August, compared to a 4.3 percent rate of increase in July. That was the slowest performance since borrowing actually fell in March.
The overall economy slowed in the spring as consumers were battered by soaring energy costs, rising interest rates and a cooling housing market.
Borrowing in the category that includes credit cards rose at an annual rate of 4.2 percent in August, following a gain of 4.7 percent in July.
Both of those gains were below the double-digit increases in May and June, months when economists believe consumers were using their credit cards as a way to cope with soaring energy prices.
Economists believe the recent declines in gasoline and other energy costs should help support consumer spending in the months ahead and keep the country from falling into a full-blown recession.
For August, borrowing for auto loans rose at an annual rate of 1.6 percent, far below the 4.1 percent gain in auto and other non-revolving loans in July.
Total consumer debt rose by $4.99 billion at an annual rate to an all-time high of $2.35 trillion in August. The August increase was in line with economists' expectations.
The Fed's consumer credit report does not cover mortgages or other loans secured by real estate.