WASHINGTON - 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 today in Washington. The median forecast in a Bloomberg survey of economists called for a $12 billion advance. Non-revolving 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.
“We have a gradually maturing recovery with decent wage gains,” Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Ill., said before the report. “Because people are earning more, they don’t need to borrow as much to fuel their consumption growth” with credit cards.
Estimates of the 34 economists surveyed ranged from increases of $9 billion to $18 billion. The report doesn’t track debt secured by real estate, such as mortgages and home-equity lines of credit.
Stocks fell as lawmakers remained deadlocked over extending the nation’s debt limit. The Standard & Poor’s 500 Index declined 0.4 percent to 1,683.58 at 3:06 p.m. in New York.