Consumer borrowing expands in July at fastest rate in nearly two years

The numbers: Consumer borrowing picked up in July at the fastest rate in almost two years, according to Federal Reserve data released Monday. Total consumer credit increased $23.3 billion. That’s an annual growth rate of 6.8%, up from a 4.1% rate in the prior month. That’s the fastest pace since November 2017. Economists has been expecting a $16 billion gain, according to Econoday.

What happened: Revolving credit, like credit cards, surged 11.2% in July, after falling 0.2% in June. That’s also the highest rate in 20 months. Nonrevolving credit, typically auto and student loans, rose 5.3% in July. The data does not include mortgage loans.

Big picture: Economists are directing all of their attention at the health of the consumer with business spending faltering in face of global weakness and trade tension. The strong labor market and rising wages have kept spending at a solid pace this year. But talk of recession could turn into a self-fulfilling prophesy if consumers pull back.