The Federal Reserve will report on consumer borrowing in June. The report will be released Thursday at 3 p.m. Eastern time.
BORROWING GROWTH SLOWS: The expectation is that consumer borrowing increased by $18 billion in June, according to a survey of economists by financial data firm FactSet.
Continue Reading Below
CREDIT EXPANDING MODESTLY: In May, consumer borrowing increased by $19.6 billion. Auto and student loans drove much of the gains and year-over-year have risen 9.3 percent. Credit card use continues to be modest, having increased over the past year by just 2.5 percent.
Americans still have a limited appetite for debt after gorging themselves on sub-prime mortgages and credit cards before recession seized the country in late 2007.
When the rate of borrowing increases, it usually points to stronger short-term growth. People increase their spending on the assumption that they will have income to repay the debt, kicking off a cycle that leads to more economic growth.
That cycle was broken by the recession, when millions of people lacked the income to repay their debts.
Over the five years in which the country's economy has rebounded, Americans have remained hesitant to take on debt. Consumer spending growth has averaged a tepid 2.2 percent a year during the recovery, compared to a 2.9 percent average during the previous expansion.
The average household debt-to-income ratio has fallen to 77 percent from the2008 peak of 95 percent, according to analysis by the bank HSBC. That debt ratio remains higher than the 69 percent average in 2001.