Consumer Debt Grows Faster Than Expected

By Bloomberg – Re-Blogged From Newsmax

U.S. consumer debt rose in November at a faster- than-estimated pace as Americans continued to borrow to finance purchases.

Total credit rose $22.1 billion from the prior month, exceeding the median estimate of economists, following a downwardly revised $25 billion gain in October, Federal Reserve figures showed Tuesday. Non-revolving debt rose the most in a year.

Key Insights

  • The report is generally in-line with other data pointing to robust U.S. consumer spending, buoyed by tax cuts and a solid jobs market that added the most workers in 10 months at year- end. The borrowing likely contributed in the fourth quarter to consumption growing at a healthy but more moderate pace than the prior two periods.
  • Revolving credit outstanding, which includes credit card debt, increased $4.77 billion after a $9.34 billion rise the prior month. The figures show Americans borrowed somewhat more cautiously at the start of the holiday season.
  • Non-revolving debt outstanding climbed $17.4 billion after rising $15.6 billion. Such debt, which includes loans for education and automobiles, may in part reflect industry data showing sales of vehicles remained steady in late 2018.
  • Lending by the federal government, which is mainly for student loans, increased by $4.6 billion before seasonal adjustment
  • Credit expanded at a seasonally adjusted annual rate of 6.7 percent, after 7.6 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.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s