Americans have been accumulating more debt as the Federal Reserve has reported that American consumers have set a new record as consumer borrowing was up $19.1 billion in July bringing the current total to $3.45 trillion. This has been a trend that has been rising steadily over the course of the past four years.
Credit card debt, which is an indicator of revolving credit and continued borrowing, was up 5.7 % but was modest compared with 10% for June according to ABC News. Student debt and car loans make the majority of the non revolving credit situation in the country. Both consumer spending and consumer borrowing make up over 70% of the nation’s economic activity.
Overall credit card debt was up to $4.3 billion while student loans and car loans were up $14.8 billion. Analysts and economists around the country feel that the job outlook is strong and, because of this, will allow for increased consumer spending and borrowing in the near future. Last week, the Labor Department reported that American companies had added 173,000 jobs. The unemployment rate, as reported by the Department of Labor, currently stands at 5.1%.
The Federal Reserve doesn’t calculate in home mortgages or other debt that uses real estate for collateral such as home equity lines of credit or loans. In the second quarter of 2015, it was reported that the economy grew at an annual rate of 3.7%. This was a huge gain over first quarter growth which only gained 0.6%. Analysts feel certain that the economy can sustain a 3% growth rate over the rest of the year.
Over the last year, consumer borrowing has increased by 6.8%. Credit card debt has risen 3.9% over that time and car loans and students loans have jumped 7.9% in the last year.