WASHINGTON (AP) – U.S. consumers in December increased their borrowing at the fastest pace in three months. The result suggests that consumer spending should remain strong in the coming months.
Borrowing expanded $21.3 billion in December, the strongest showing since an increase of $28.6 billion in September, the Federal Reserve reported Friday. That pushed total borrowing to a fresh record of $3.55 trillion.
Borrowing in the category that covers credit cards rose $5.8 billion, slightly below the November gain. Borrowing in the category that covers auto and student loans jumped $15.4 billion in December, notably higher than the November gain of $7.7 billion.
Consumer spending, which accounts for 70 percent of economic activity, is expected to accelerate this quarter after slowing in late 2015.
The overall economy grew at a lackluster annual rate of just 0.7 percent in the October-December period as consumer spending slowed to a growth rate of 2.2 percent. Economists are looking for further gains in employment to bolster spending in the current quarter.