WASHINGTON – Americans increased their borrowing in July at the slowest pace in four months as the gain in credit card debt fell off sharply.
The Federal Reserve reported Friday that consumer borrowing rose at an annual rate of 2.8 percent in July, down from an increase of 7.3 percent in June.
The slowdown was led by a sharp deceleration in credit card debt, which rose by just 3.4 percent in July after gains of 13.2 percent in June and 13 percent in May.
Borrowing to buy autos also slowed in July to an annual rate of gain of just 2.5 percent after an increase of 4 percent in June.
All of the increases pushed debt up by $5.5 billion after a much larger increase of $14.1 billion in June, which had been originally reported as a gain of $10.3 billion. The July increase was slightly below the $6.5 billion advance economists had been forecasting.
The increases left consumer credit at a record level of $2.35 trillion. The Fed's measure of consumer credit does not include mortgages and other loans secured by property.
Consumer spending, which accounts for two-thirds of the total economy, slowed abruptly in the spring, pushing overall economic growth down to a 2.9 percent rate of increase.
Analysts believe consumer spending will remain sluggish in coming months as Americans struggle with high energy prices and interest rates and a cooling housing market.