Make us your home page
Instagram

Consumer borrowing up $18.1B in August

WASHINGTON — Americans boosted their borrowing in August by the largest amount in three months, with strong gains in the category that covers auto and student loans, as well as in credit card debt.

Total consumer borrowing increased $18.1 billion in August from July, the Federal Reserve reported Friday. In July, consumer borrowing had fallen for the first time in nearly a year.

The rebound in August, along with a separate report that showed the nation's unemployment rate dropped to 7.8 percent in September, were viewed as encouraging signs for an economy that has been struggling in recent months.

The August borrowing gains reflected a $4.2 billion increase in borrowing on credit cards and a $13.9 billion increase in auto and student loans.

Retail sales rose in August, in part because consumers bought more cars and trucks. However, they were cautious elsewhere, as rising gas prices left them less to spend in other areas.

Activity through August left total consumer debt at $2.73 trillion, putting it 5.5 percent above the prerecession peak for credit hit in July 2008.

Consumers have been using credit cards much less since the 2008 credit crisis. Four years ago, Americans had $1.03 trillion in credit card debt, an all-time high. In August, that figure was 17 percent lower.

During the same period, student loan debt has increased dramatically. The category that includes auto and student loans, along with other loans for items such as boats, has jumped 20.3 percent since July 2008.

In the April-June quarter, student loans totaled $914 billion, according to a recent report from the Federal Reserve Bank of New York, nearly a 50 percent increase from the July-September quarter of 2008.

Much of the increase in student loans is because of high unemployment, which has led many Americans to go back to school in hopes of improving their education and skills in a more competitive labor market.

American finances have been improving. In a separate quarterly report, the Fed said last month that a jump in the stock market and rising home prices are bringing Americans closer to regaining the wealth they lost in the recession.

In the 2007-2009 recession, Americans lost nearly a quarter of their wealth, from a prerecession peak of $67.4 trillion in the fall of 2007. Household wealth plummeted to $51.2 trillion in early 2009. But as of the April-June quarter, household net worth has risen to $62.7 trillion. The net worth figure is the difference between assets and liabilities such as mortgages and other loans.

Deficit tops

$1 trillion again

A new estimate puts the deficit for the just-completed 2012 budget year at $1.1 trillion, the fourth straight year of trillion-dollar deficits. The result was a slight improvement from the 2011 deficit of $1.3 trillion. The bleak figures from the Congressional Budget Office, while expected, add fodder for the heated presidential campaign, in which President Barack Obama's handling of the economy and the budget is a main topic. The administration will release the official deficit numbers around mid October, but they should line up closely with the CBO estimate, which showed that the government borrowed 31 cents for every dollar it spent.

Consumer borrowing up $18.1B in August 10/05/12 [Last modified: Friday, October 5, 2012 8:52pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]