US consumer credit rises less than expected in August

[WASHINGTON] US consumer credit increased less than expected in August and growth for the prior month was revised lower, giving a cautious signal about the pace of economic expansion.

Total consumer credit rose US$13.5 billion to US$3.25 trillion in August, the Federal Reserve said on Tuesday. The figure for July was revised down to show a gain of US$21.6 billion.

Economists polled by Reuters had expected consumer credit to increase US$20 billion in August.

The weak reading could bolster the view that economic growth downshifted in the third quarter from the torrid pace of expansion clocked in the prior three months. Most economists see the economy expanding at around a 3 per cent annual rate in the July-September period, which would be slower than in the second quarter but faster than average growth over the last few years.

The slowdown in credit growth in August was mostly due to a US$207.5 million drop in revolving credit, which mostly measures credit card use. Non-revolving credit, which includes auto loans as well as student loans made by the government, increased US$13.7 billion. - Reuters