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Monday, January 9, 2012

Consumer Credit Jumped in November

Consumer credit increased by $20 billion in November, its largest increase in 10 years, according to a Federal Reserve report released this afternoon. The surge indicates that banks are willing to lend and households are willing to borrow. Consumer credit has now risen in 10 out of 11 months in 2011.


Non-revolving credit drove the increase, rising $14.8 billion. This increase was driven by a large increase in federal government and student loans, which accounted for about 80% of the monthly change on a non-seasonally adjusted basis.

Revolving credit rose by $5.6 billion in November, its largest gain since March 2008. Commercial banks’ revolving balances contributed about two thirds of this growth on a non-seasonally adjusted basis.


Consumer credit’s surge in November was driven by an increase in federal government and student loans. Despite this, consumers increased their borrowing for both big ticket items (non-revolving) and smaller purchases (revolving), indicating that consumers are optimistic enough to take on more debt.

Read the report.

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