WASHINGTON (AP) — Consumer borrowing rose at a slower pace in December, but that still pushed total borrowing to a new record above $4 trillion for the first time.
The Federal Reserve said Thursday that borrowing increased by $16.6 billion in December after a $22.4 billion advance in November. The December increase nudged the total up to a record $4.01 trillion. Borrowing had crossed the $3 trillion mark back in June 2013.
Borrowing in the category that includes credit cards rose by $1.7 billion in December, down from a $4.8 billion November increase. Borrowing in the category that covers auto loans and student loans rose by $14.8 billion following a larger $17.6 billion gain the previous month.
Analysts expect further gains in consumer borrowing, supported by low unemployment and steady income gains.
Consumer borrowing is closely watched for clues it can provide on consumer spending, which accounts for 70 percent of economic activity.
The government’s report on overall economic growth, as measured by the gross domestic product, has been delayed because the 35-day partial government shutdown has disrupted the flow of government data. Private economists believe GDP growth slowed to around 2.5 percent in the fourth quarter, and they expect growth to slow even more in the current January-March quarter.
The Fed’s monthly borrowing report does not cover home mortgages or any other loans secured by real estate such as home equity loans.
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