(Bloomberg) -- U.S. consumer debt rose in October by the most in almost a year and topped estimates, indicating Americans were stepping up borrowing to finance purchases.
Total credit rose $25.4 billion from the prior month, exceeding the median estimate of economists for a $15 billion increase, following an upwardly revised $11.6 billion gain in September, Federal Reserve figures showed Friday. Credit-card and other revolving debt rose by the most in 11 months and non-revolving credit also increased.
- The results are in sync with other reports indicating consumption will continue to rise this quarter, albeit at a less-robust pace than the prior quarter. Along with taking on credit, the strong job market and lower taxes are helping households to keep spending.
- Revolving credit outstanding increased $9.2 billion, after a decline of $310 million. The figures, which include credit card debt, may be a sign consumers were ready to borrow more freely heading into the holiday season even as the Fed is on track to raise borrowing costs in December.
- Non-revolving debt outstanding climbed $16.2 billion after rising $11.9 billion the prior month. Such debt, which includes loans for education and automobiles, is in line with industry data showing sales of vehicles remain strong.
- Lending by the federal government, which is mainly for student loans, advanced by $2.9 billion before seasonal adjustment.
- Credit grew at a seasonally adjusted annual rate of 7.7 percent, the fastest in 11 months, after 3.5 percent in the prior month.
- The central bank’s consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.
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