American Borrowing Increases at Slowest Annual Pace in Three Months

According to the Associated Press, Americans borrowing increased in June at the slowest annual pace in three months as the level of credit card debt fell slightly.

The Federal Reserve also said on Tuesday that consumer debt rose a seasonally adjusted $10.2 billion in June from the prior month to a total of $3.91 trillion. Consumer borrowing increased at an annual rate of 3.1 percent in June, the slowest annual gain since March.

Credit card spending slipped by $185 million in June after having surged by nearly $9.6 billion in May.

The reason all of this is important is because consumer borrowing trends are closely monitored for any sort of clues they can provide about the willingness of consumers to borrow more to support their spending. Consumer spending accounts for 70 percent of U.S. economic activity.

During the April-July quarter, U.S. economic growth accelerated to an annual pace of 4.1 percent. The gain nearly doubled the annual growth rate of 2.2 percent during the first three months of 2018.

By contrast, the Fed's monthly borrowing report does not include mortgages or any other debt secured by real estate, such as home equity lines of credit.