Consumer borrowing slowed in June to the smallest increase in three months as a jump in auto loans and student loans was offset by a big drop in borrowing on credit cards.
Total credit rose $14.6 billion, the least in three months and undershooting the median estimate of economists after a revised $17.8 billion increase in May, Federal Reserve figures showed Wednesday. It was the smallest increase since a $9.9 billion gain in March.
The June advance was entirely due to the biggest increase in non-revolving credit this year.
Auto and student loans rose by $14.7 billion, the biggest gain since December. Borrowing in the category that covers credit cards fell by $80.5 million following a gain of $7.5 billion in May. It was the third monthly decline in the credit card category in the past seven months.
Consumer borrowing is monitored for signals it provides on the prospects for consumer spending.
The overall economy, as measured by the gross domestic, slowed to growth at an annual rate of 2.1% in the April-June quarter, compared to 3.1% GDP growth rate in the first quarter.
But consumer spending, which drives about 70% of economic activity, accelerated to a sizzling 4.3% growth rate in the second quarter after a lackluster 1.1% annual gain in the January-March quarter.
Economists are looking for GDP growth to be around 2% in the second half of this year as the consumer sector continues to perform well. The June increase pushed consumer credit to a…