clear
Friday September 4th, 2015 12:40PM

Americans cut back on credit cards for 3rd month

By The Associated Press
WASHINGTON (AP) -- Americans cut back on using their credit cards in August for a third straight month, a sign that consumers remain cautious about spending.

Consumers increased their borrowing $13.6 billion in August to a seasonally adjusted $3.04 trillion, the Federal Reserve said Monday. That's a record and it followed a gain of $10.4 billion in July.

Once again, the increase in borrowing was driven entirely by auto and student loans. A measure of those loans rose $14.5 billion to $2.19 trillion.

But credit card debt dropped $883 million to roughly $850 billion. The decline could hold back consumer spending, which accounts for roughly 70 percent of economic growth.

The report highlighted trends that have surfaced in the post-recession economy.

The measure of auto and student loans has risen 8.2 percent from a year ago and in every month but one since May 2010. But credit card debt is essentially where it was a year ago. And it is 16.9 percent below its peak hit in July 2008 - seven months after the Great Recession began.

Slow but steady job growth and small wage gains have made many Americans more reluctant to charge goods and services. Consumers may also be hesitant to take on high-interest debt because they are paying higher Social Security taxes this year.

At the same time, the weak economy is persuading more people to attend college. The Federal Reserve Bank of New York quarterly report on consumer credit shows student loan debt has been the biggest driver of borrowing since the Great Recession officially ended in June 2009.

The Fed has just started separating out student loans from auto loans. But that data are two months behind the report. For June, the most recent month available, student loans totaled $1.18 billion while auto loans totaled $841 million. Those figures are not seasonally adjusted.

The economy grew at a modest 2.5 percent annual rate in the April-June quarter. Most economists expect growth slowed in the July-September quarter to an annual rate of about 2 percent or less, held back in part by weaker growth in consumer spending.

Analysts had thought that consumers would step up spending and help drive faster growth in the final three months of the year. But a partial government shutdown has now lasted a week and will leave hundreds of thousands of federal workers without paychecks. That is likely to further dampen consumer spending and hold back growth in the October-December quarter.

The consumer credit report is one of the few government reports issued since the shutdown began. The Fed kept operating because it does not depend on budget appropriations from Congress.

The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages, home equity loans or other loans secured by real estate.
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
US stocks decline as mixed jobs report keeps investors guessing about the Fed's next move
NEW YORK (AP) — Stocks are moving lower after the latest jobs report gave investors little guidance over whether the Federal Reserve will raise interest rates this month.The Dow Jones industrial avera...
11:59AM ( 40 minutes ago )
With defiant Kentucky county clerk behind bars, gay couples receive marriage license
MOREHEAD, Ky. (AP) — A gay couple emerged from a Kentucky county clerk's office with a marriage license in hand Friday morning, embracing and crying as the defiant clerk who runs the office remained j...
11:33AM ( 1 hour ago )
US employers added 173,000 jobs in August; unemployment rate falls to 7-year low of 5.1 pct.
WASHINGTON (AP) — The U.S. unemployment rate fell to a seven-year low in August as employers added a modest 173,000 jobs, a key piece of evidence for the Federal Reserve in deciding whether to raise i...
9:35AM ( 3 hours ago )
Judge nixes 4-game 'Deflategate' suspension for Tom Brady; NFL quickly appeals to 2nd Circuit
NEW YORK (AP) — Tom Brady learned Thursday he will start the season on the field after a judge lifted the league's four-game suspension of the star quarterback for a scandal over deflated footballs, s...
9:19PM ( 15 hours ago )
Trump signs GOP pledge to back party's 2016 nominee, says he won't consider third-party bid
NEW YORK (AP) — Caving to intense Republican lobbying, presidential candidate Donald Trump ruled out the prospect of a third-party White House bid on Thursday and vowed to support whoever wins the par...
8:15PM ( 16 hours ago )