WASHINGTON (AP) — Americans increased their borrowing in August with the category that covers auto and student loans rising by the largest amount in nine months.
Consumer debt rose by a seasonally adjusted $20.1 billion in August following a gain of $16.6 billion in July, the Federal Reserve reported Friday.
The August performance exceeded expectations. Many economists had been looking for a smaller increase of around $15 billion.
The gain was led by a $15.2 billion rise in auto loans and student loans, the biggest jump in this category since last November. The category that covers credit cards saw an increase of $4.8 billion, up from a $1.3 billion rise in July.
The overall economy grew at a robust annual rate of 4.2 percent in the April-June quarter, helped by increased spending fueled by the $1.5 trillion tax cut that President Donald Trump pushed through Congress last year.
Many economists believe consumer spending will remain strong for the rest of the year and they are forecasting that overall growth, as measured by the gross domestic product, will hit 3 percent this year, the best performance in 13 years.
The report on borrowing showed it rising to a new record of $3.94 trillion. The Fed’s monthly report on consumer borrowing does not include mortgage debt or any other loans secured by real estate including home equity loans.