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U.S. consumer borrowing slows in August

Staff writer |
U.S. consumer credit slowed expansion pace in August, as consumers tightened their belt on auto and education loans, data by the Federal Reserve showed.

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Total outstanding consumer credit increased at an annual rate of 5.6 percent in August, slower than a revised gain of 6.6 percent in the previous month.

Revolving debt, which includes credit cards, rose 5.3 percent, while the borrowing in the non-revolving category that includes auto and student loans rose at an annual rate of 5.7 percent.

Consumer spending, which accounts for about 70 percent of the overall U.S. economic activity, is the major engine of U.S. economic growth.

The slower consumer credit growth in August suggested slow growth in income continued to hold down consumers's willingness to shop on credit.

Fed data showed the averaged hourly earnings has been increasing at ultra slow pace for months, indicating the benefits of the economic recovery have yet to trickle down to the ordinary people.

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