WASHINGTON (AP) -- The Federal Reserve releases its August report on consumer borrowing. The report will be issued at 3 p.m. EDT Tuesday.
BORROWING UP: The expectation is that consumers increased their borrowing by $20 billion in August, according to a survey of economists by the data firm FactSet.
STRONG BORROWING: In July, Americans stepped up their borrowing, led by rising auto loans and higher credit card balances. They increased borrowing $26 billion for the month. The percentage increase was 9.7 percent, matching the gain in April as the largest monthly gain in three years.
Rising consumer debt is usually a sign that consumers are more confident about spending money, a development which is good for economic growth. Consumer spending accounts for about 70 percent of economic activity.
Consumer spending rose a healthy 0.5 percent in August, adding to signs that the economy was sustaining strength in the July-September quarter, gains that are expected to continue in the final three months of the year. The government reported Friday that employers added a strong 248,000 jobs in September and the number of jobs created in July and August was revised up by 69,000. The gains helped push the unemployment rate down to a six-year low of 5.9 percent last month.
Stronger borrowing trends have been led by rising demand for auto loans and student loans. A large rise in student debt has raised concerns that young Americans are being saddled with student loans that will keep them from buying homes or spending as previous generations have after college.
Student loans have soared since the recession ended, topping $1.1 trillion in the second quarter of this year. That's up from $700 billion in 2009.
The New York Federal Reserve reported that demand for auto loans reached the highest level in eight years this spring with more people with checkered credit histories obtaining the loans. That has raised worries about the potential for defaults down the road.
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