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U.S. consumer credit increased more than forecast in August as school loans and other non-revolving debt rose by the most in three years.
Total credit climbed $17.9 billion from the prior month, after a revised $23 billion gain in July that was the largest since late 2017, Federal Reserve figures showed Monday. The median estimate in a Bloomberg survey of economists called for a $15 billion increase. Outstanding non-revolving credit jumped $19.8 billion.
The advance in non-revolving debt, which includes educational loans, was the biggest since August 2016 and probably reflected the start of a new school year at the nation’s universities. The gain more than offset a $1.9 billion decrease in revolving debt outstanding. The revolving-credit figure signals households are trying to keep their budgets in check. As businesses cut back on investment and the manufacturing sector shrinks further, the nation relies increasingly on consumers to spend and propel growth.Data out last week showed cooling job growth and the weakest wage gains in more than a year. Still unemployment hit a half-century low, which should support future consumption.Non-revolving debt outstanding also includes loans for cars.
Credit expanded at an annual rate of 5.2% in August, after growing 6.7% the month prior.Lending by the federal government, which is mainly for student loans, jumped by $19.4 billion before seasonal adjustment.The consumer credit report doesn’t track debt secured by real estate, such as home mortgages.
--With assistance from Jordan Yadoo.
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