Consumer borrowing accelerated by far more than expected in September, as American households dealt with rising prices by swiping their credit cards and taking out more loans.
Total consumer credit increased $29 billion, up from a $13.8 billion gain in August, according to data released by the Federal Reserve Friday.
Economists had been expecting a $15.5 billion gain, according to Econoday.
That’s a monthly gain of 0.7 percent, well above the decade average of 0.4 percent. Compared with a year ago, consumer debt is up 4.9 percent.
Consumer prices rose 0.4 percent in September and were up 5.4 percent compared with the prior September.
The gain in September translates into an annual growth rate of 8.3 percent in September, a big pick up from the 3.8 percent pace in August.
Revolving credit, which is mostly credit cards, rose 11.8 percent, which follows a 3.4 percent gain in August.
Expansions in revolving credit can be an indicator of economic confidence and can help an economy grow. But they can also be a signal of economic distress if cash-strapped households are turning to credit to make up for income gaps.
Nonrevolving credit—which is mostly auto and student loans—rose 7.2 percent. These loans were up 4 percent in August.
The Fed’s consumer credit data does not count mortgages, the biggest type of household debt.