US Consumer Credit Hits All Time High Amid Surge In Student And Auto Loans

After a surprising slump in the use of revolving debt in September, when US consumers unexpectedly paid down a total of $23 million (revised) on their credit cards, followed by a sharp rebound in credit card usage in October, moments ago the Fed reported that in November, the surge consumer credit continued, rising by $22.1 billion, above the $17.5 billion expected, after October's whopping $25 billion increase as non-revolving credit surged by the most since December 2017. The surge in borrowing in November brought the total to $3.979 trillion, a new all-time high, largely on the back of newfound love with auto and student loans.

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After a brief, one-month dormancy in credit cards used in September, American consumers have clearly returned to doing what they do best - spending money they don't have - with revolving credit jumping by $4.8 billion, one month after it surged by $9.3 billion. The latest monthly increase brought the total credit card debt to a new all-time high of $1.042 trillion.

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But the big reason behind the November surge in consumer credit was nonrevolving credit, i.e. student and auto loans, which soared by $17.4 billion, the highest monthly total since 2017, and bringing the nonrevolving total to a new all time high of $2.937 trillion.

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In other words, while Americans have rediscovered their enthusiasm to use their credit cards, they found a particular fascination with buying cars (on credit) while taking out college loans, not necessarily in that order.

And while the ongoing rebound in revolving credit use will silence any questions about the resilience of the US consumer heading into the holiday spending season, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all-time highs, with a record $1.564 trillion in student loans outstanding, an impressive increase of $33 billion in the quarter, while auto debt also hit a new all-time high of $1.141 trillion, an increase of $16 billion in the quarter.

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