Estimated read time: 1-2 minutes
WASHINGTON (AP) — American consumers increased their borrowing at a slower pace in June, as the category that includes auto and student loans posted the smallest gain in a year.
The Federal Reserve said Monday that overall consumer credit expanded by $12.4 billion in June, down from May's $18.3 billion increase and less than economists had been expecting.
The credit report is closely watched for clues about the direction of consumer spending, which accounts for about 70 percent of economic activity.
Non-revolving credit, which includes auto and student loans, rose $8.3 billion, down from an $11.4 billion jump in May and the smallest amount since a $7 billion increase in June 2016. The category that includes credit cards climbed $4.1 billion, down from May's $6.9 billion gain.
The June increase brought consumer credit to a fresh record of $3.86 trillion. The Fed's monthly credit report does not include mortgages or other debt secured by real estate, including home-equity loans.
The U.S. economy rose at a solid 2.6 percent annual pace from April through June on a healthy increase in consumer spending. The job market also looks good. Employers last month added 209,000 jobs, and the unemployment rate fell to a 16-year low 4.3 percent.
But the Commerce Department reported last week that consumer spending slowed in June as incomes grew at the weakest pace in seven months.