Consumer borrowing rose at the slowest pace in more than five years in January, suggesting the economy’s growth engine may be running closer to empty than previously believed.
Total consumer credit increased $8.8 billion in January to a seasonally adjusted $3.77 trillion, posting an annual growth rate of only 2.8%, the Federal Reserve reported Tuesday.
That is the slowest monthly growth rate since August 2011. The data may reflect renewed consumer uncertainty. That could hit the economy, as consumer spending makes up about 70% of gross domestic product.
The tepid increase in consumer borrowing was also below economists’ estimates for an $18.3 billion gain in January, according to Econoday. Consumer credit increased a revised $14.8 billion in December.