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US consumer credit rose most in 11 months in October
[WASHINGTON] US consumer debt rose in October by the most in almost a year and topped estimates, indicating Americans were stepping up borrowing to finance purchases.
Total credit rose US$25.4 billion from the prior month, exceeding the median estimate of economists for a US$15 billion increase, following an upwardly revised US$11.6 billion gain in September, Federal Reserve figures showed Friday. Credit-card and other revolving debt rose by the most in 11 months and non-revolving credit also increased.
The results are in sync with other reports indicating consumption will continue to rise this quarter, albeit at a less-robust pace than the prior quarter. Along with taking on credit, the strong job market and lower taxes are helping households to keep spending.
Revolving credit outstanding increased US$9.2 billion, after a decline of US$310 million. The figures, which include credit card debt, may be a sign consumers were ready to borrow more freely heading into the holiday season even as the Fed is on track to raise borrowing costs in December.
Non-revolving debt outstanding climbed US$16.2 billion after rising US$11.9 billion the prior month. Such debt, which includes loans for education and automobiles, is in line with industry data showing sales of vehicles remain strong.
Lending by the federal government, which is mainly for student loans, advanced by US$2.9 billion before seasonal adjustment.
Credit grew at a seasonally adjusted annual rate of 7.7 per cent, the fastest in 11 months, after 3.5 per cent 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.