WASHINGTON – U.S. consumers stepped up their borrowing in July, led by rising auto loans and higher credit card balances.
Continue Reading Below
The Federal Reserve says overall consumer borrowing rose $26 billion in July to $3.24 trillion. The 9.7 percent increase matches April's gain as the largest in three years.
The healthy increase would typically indicate that consumers are shedding some caution about spending, which would boost economic growth. Rising debt loads are generally a sign of greater confidence in the economy. But the data contradict other evidence that the consumer remains frugal. Overall spending fell in July for the first time since January.
Auto and student loans jumped 10.6 percent to $2.36 trillion, fueled by strong auto sales. Credit card debt, meanwhile, rose 7.4 percent to $880.5 billion.