WASHINGTON — Americans took on $6.31 billion more in installment debt than they paid off in August, only slightly more than the July level, the government reported Wednesday.
The Federal Reserve Board said the August increase was only $65 million higher than the $6.25 billion in debt taken out in July.
Some analysts had predicted a bigger increase for August based on the surge in auto sales that occurred during the month as buyers responded to attractive financing deals being offered by auto makers. However, the increase in auto loans for August was only $2.36 billion, down slightly from the July level of $2.69 billion.
James Christian, chief economist for the U.S. League of Savings Institutions, pointed out that the Fed figures are adjusted to take into account normal seasonal swings. He said this adjustment leveled the auto sales pickup, since auto sales normally rise in August.
The annual rate of growth in consumer debt in August was 15%, down from the 19% annual pace set from April through June.
Christian said this moderation was good for the economy because it brought the debt increases more in line with gains in personal income and enhanced the chances that consumers will keep spending in coming months.
"This is a more sustainable pace. If consumers had suddenly backed off, that would have been a shock to the economy that we don't have the margin to tolerate," he said.
The August credit report gave these other details:
- Cash loans from banks and other short- and medium-term personal debt rose by $2.68 billion in August, down from a $2.7-billion increase in July.
- The category including credit card debt rose by $936 million in August, up from a July gain of $856 million.
The total was up even more sharply from June, when consumers paid off $73 million more in debt than they took out.
The various changes left total consumer debt outstanding at $512.08 billion at the end of August on a seasonally adjusted basis.