August Rise in Consumer Credit Tops Forecast

Americans borrowed money more freely in August as they made heavy use of credit cards and financed autos and other personal items on credit. The Federal Reserve said consumer credit increased by a larger-than-expected seasonally adjusted $13.4 billion, or 10.9% at an annual rate, the fastest pace since June. Many analysts had expected borrowing to grow by $10.5 billion in August. Consumer credit in July grew by $9.1 billion, or at an 7.4% rate, according to revised figures. That was less than the $9.4 billion the Fed had forecast. In August, demand for revolving credit, such as that used for credit cards, rose by $7.2 billion--a breakneck 13.5% annual rate--up from $3.7 billion and a 7.1% rate in July. The Fed’s report includes credit card debt and loans for autos, boats and mobile homes. It does not include loans backed by real estate.