Auto Loans and Student Debt Bubble Fuel Consumer Borrowing
Thanks to consumers willing to take on student debt and auto loans, consumer borrowing in the United States increased in December for the fifth consecutive month.
Overall, consumer credit ex-mortgage amounts rose $14.6 billion in the final month of 2012 to reach almost $2.8 trillion, according to the Federal Reserve. In comparison, the median forecast of 30 economists surveyed by Bloomberg expected only a $14 billion increase in December. Revolving credit, which includes credit cards, declined by $3.63 billion, the biggest drop since July 2012, but it was easily offset by the surge in non-revolving debt.
Financing for major items such as college tuition and auto purchases jumped $18.2 billion in December, the biggest gain in 11 years. Lending by the federal government, primarily for education loans, increased by $5.5 billion.
The results echo recent reports about auto loans and the student loan bubble…