Consumers increased borrowing by the smallest amount since 2011

WASHINGTON – U.s. consumers increased their loans to the slowest pace in April than they have in almost six years. Credit card spending growth is slowing, while the borrowing costs profit for the school and the cars also cooled.

The Federal Reserve reports that total consumer loans increased $8.2 billion, or 2.6 percent, to $3.8 billion. It was the smallest percentage increase since loans decreased from 3.5 percent in August 2011.

The category with the student and auto loans increased from $6.7 billion, or by 2.9 percent — the smallest increase in that category since August 2011.

Credit card loans increased $1.5 billion, or 1.8 per cent.

Consumer loans are closely monitored by economists to determine the consumers willing to use more debt to support their spending. Consumer spending accounts for 70 percent of U.S. economic activity.

The Department of Commerce reported last month that consumer spending rose in April in part due to solid gains in incomes. Economists think that the growth in consumer credit will remain strong this year, as a result of low unemployment and strong consumer confidence.

The Labor Department reported somewhat slow job gains from last week, but it was enough to nudge the unemployment rate down to 4.3 percent, the lowest level in 16 years.

The Federal Reserve Bank of New York reported last month that the U.S. household debt had reached a record high in the first quarter of 2017, larger than the previous peak in 2008, when the financial crisis plunged the economy into a deep recession.

Even with the debt ratio back to record heights, analysts say that household borrowing seems more sustainable now than almost a decade ago. The nature of what the Americans owe has changed since the Great Recession, with student and auto loans are part of a larger part of the debt of households. Mortgages — the epicenter of the financial crisis — and the credit card debt under the pre-recession levels. Also the interest rates are lower and lenders are much more focused on credit-worthy borrowers.

The Fed’s monthly consumer credit report does not cover mortgages or other loans secured by real estate such as a home equity loans.

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