People were shopping 'til they dropped in August, according to the Federal Reserve. The Fed reported that total consumer installment credit increased $10.8 billion to $1.36 trillion in August, marking the strongest monthly increase in seven months. Consumer debt grew at a rate of 9.6 percent in August, which was up from 7.9 percent in July.
This borrowing increase was well above the $6.9 billion predicted by economists and may give the Federal Reserve fuel to raise interest rates as a way to slow spending.
For the eighth consecutive month, the automobile industry reported large sales increases. Retail sales also increased along with jobs that are producing larger incomes. The non-revolving credit category grew at a 10.1 percent annual rate in August to $6.5 billion.
Some experts point out that this high rate of consumer spending won't last forever - and believe that the Fed is likely to see it that way as well.