WASHINGTON (AP) — Consumers slashed their borrowing in August by the most in 16 months. The drop suggests many worried about taking on new debt while the economy slumped and the stock market fluctuated wildly.
Fewer people used their credit cards. And a measure of auto and student loan demand fell.
Total borrowing dropped by $9.5 billion in August, the Federal Reserve said Friday. That follows an increase of $11.9 billion in July.
Consumer borrowing had risen for 10 straight months before the August decline, which was the largest drop since April 2010
Borrowing for auto and student loans plunged $7.2 billion in August. A category that includes credit cards tumbled $2.3 billion.
The overall decline lowered total borrowing to a seasonally adjusted $2.44 trillion. Borrowing is just 2.1 percent higher than the recent low hit in September of last year.Americans have been struggling with high unemployment, meager pay raises and a big jump in gasoline prices in the spring. That has depressed consumer spending, which fuels 70 percent of economic growth.