Consumer borrowing rose more than projected in August as Americans took out more loans for motor vehicle purchases and education.
The $13.6 billion increase in credit followed a $10.4 billion gain in July, the Federal Reserve said Monday in Washington. Nonrevolving debt, which includes financing for college tuition and motor vehicles, climbed $14.5 billion.
The boost to household wealth from improved home values and stock-market gains has put consumers in a position to take advantage of cheaper borrowing costs for major purchases such as automobiles. Credit-card lending declined for a third month, showing Americans are being deliberate in taking on more debt to finance other purchases.
“The auto industry has done quite well, and student loans from the federal government have been on the rise,” said Gregory Daco, senior U.S. economist at Oxford Economics USA in New York. “Consumers are willing to spend, but they’re more cautious about ensuring they have sufficient income.”