Consumer Debt Surges in July

U.S. consumer debt outstanding surged in July as shoppers whipped out their credit cards and took advantage of new-car incentives, according to a Federal Reserve report.

The Fed said consumer credit rose by a seasonally adjusted $10.8 billion in the month, the largest monthly gain since November.

Revolving credit, which includes credit and charge cards, rose by $6.5 billion, while nonrevolving credit, which includes auto and other closed-end loans, was up $4.4 billion in the month

Consumer debt in June also was revised upward to an $8.9-billion gain instead of the $8.4-billion increase initially reported.

The gain in nonrevolving debt had been expected, given low-interest financing deals offered by car makers. The increase in revolving debt, however, was something of a surprise because consumer confidence numbers slipped over the summer. Economists said the increase in revolving debt showed a more steadfast outlook, as consumers remained confident enough to continue adding debt.