U.S. consumers added $10.4 billion to loan balances in July, following a revised $11.9 billion increase in June that was less than initially reported, the Federal Reserve reported Monday.
The latest jump in consumer credit for July was also less than forecast by Wall Street analysts, with both revolving and non-revolving loan balances posting an annual growth rate of 4.4 percent to $2.852 trillion.
The monthly report continues to show that U.S. consumers are reducing their credit card debt. But their love affair with the automobile — and light trucks — is in full swing as demand for financing is bolstering sales for the biggest automakers.
Revolving balances, mostly credit card loans, were down 2.6 percent at an annual rate in July to $849.8 billion.
Non-revolving debt, which includes student loans for college tuition and loans for the purchase of vehicles, increased $12.3 billion after a $15.6 billion gain in June.
The average price for a new vehicle set a record of $31,252 in August, according to TrueCar.com, up 3.2 percent from a year ago.
The record was bolstered by five car companies, each with record prices in August: Chrysler, Ford, Honda, Nissan and Volkswagen.
Cars and light trucks sold last month at a 16 million annualized rate, the fastest since November 2007, according to Ward's Automotive Group. Sales at General Motors, Ford, Toyota and Honda surpassed analysts' estimates.
The Fed's consumer credit figures do not reflect mortgage debt or other loans tied to real estate.
