Fueled by school loans and purchases of new cars, U.S. consumers borrowed more in August than they have in almost a year, according to a Bloomberg report.
According to the report, borrowing in August increased by $25.9 billion, or 8.5 percent, compared to a $17.8 billion gain in July. Most experts believed that borrowing would actually be lower than it was in July, with an increase of only $16.5 billion.
This was the largest increase in borrowing since Sept. 2015, according to Bloomberg.
Non-revolving credit, which includes automobile and school loans, rose by $20.2 billion in August, while revolving debt rose by $5.6 billion.
According to the Federal Reserve, federal government lending to U.S. consumers — mostly in the form of school loans — rose by $18.7 billion in August, mainly fueled by students preparing for school in the fall and borrowing to pay their first semester’s tuition.
An increase in consumer borrowing and spending on large purchases, like automobiles, reflects increased confidence in the strength of the U.S. economy, another positive sign in recent months to go along with steady hiring and income growth.