November consumer debt up most in 10 years
http://dervishcom.blogspot.com/2012/01/november-consumer-debt-up-most-in-10.html
Americans dug their debt hole deeper by more than $20 billion in November, the biggest monthly gain in 10 years, the Federal Reserve reports.
Not counting mortgage debt, Americans owe $2.48 trillion.
Total consumer credit increased at an annual rate of 10%, with so-called revolving credit -- including credit cards -- rising 8.5% annually, and nonrevolving credit -- such as auto or education loans -- jumping at an annualized rate of 10.75%.
The $20.4 billion monthly increase was the most since November 2001, when consumers borrowed $28 billion more than the month after the Sept. 11 terror attacks.
Here are the Fed's numbers (pdf).
Bloomberg News says the increase was nearly twice as big as the highest forecast of 31 economists it surveyed.
Why did Americans take on more debt? The Associated Press calls it "a sign of their growing confidence in the economy."
Bloomberg echoes that, but tempers the optimism. A drop in unemployment "is giving households the courage to take advantage of holiday discounts, buy cars and finance higher education. At the same time, dependence on credit means the job market has yet to improve enough to provide the incomes needed to sustain consumer purchases, which account for about 70 percent of the economy."
"Consumers are feeling more confident and making more big- ticket purchases, said Richard DeKaser, an economist at Parthenon Group Inc. in Boston. "The debt pay downs of previous years are now allowing consumers to borrow a bit more freely."
Not counting mortgage debt, Americans owe $2.48 trillion.
Total consumer credit increased at an annual rate of 10%, with so-called revolving credit -- including credit cards -- rising 8.5% annually, and nonrevolving credit -- such as auto or education loans -- jumping at an annualized rate of 10.75%.
The $20.4 billion monthly increase was the most since November 2001, when consumers borrowed $28 billion more than the month after the Sept. 11 terror attacks.
Here are the Fed's numbers (pdf).
Bloomberg News says the increase was nearly twice as big as the highest forecast of 31 economists it surveyed.
Why did Americans take on more debt? The Associated Press calls it "a sign of their growing confidence in the economy."
Bloomberg echoes that, but tempers the optimism. A drop in unemployment "is giving households the courage to take advantage of holiday discounts, buy cars and finance higher education. At the same time, dependence on credit means the job market has yet to improve enough to provide the incomes needed to sustain consumer purchases, which account for about 70 percent of the economy."
"Consumers are feeling more confident and making more big- ticket purchases, said Richard DeKaser, an economist at Parthenon Group Inc. in Boston. "The debt pay downs of previous years are now allowing consumers to borrow a bit more freely."
