Americans added $22.15 billion in debt last month bringing outstanding consumer borrowing to a record $3.979 trillion reported the Federal Reserve on Tuesday. This followed October's $25 billion gain. An increase of $17.5 billion had been forecast.
Chart: Reuters
The surge was powered by a $17.4 billion jump in non-revolving credit, primarily student and automobile loans. It was the largest monthly sum since 2017 and brought the total to $2.937, an all-time high. Non-revolving debt has a fixed amount and interest rate and is repaid on a contractual basis.
Student loans reached a record total of $1.564 trillion as did auto loans at $1.141 trillion.
Consumers have been emboldened by the best job market in a generation and the largest gains in compensation since the financial crisis and recession a decade ago. The economy created 312,000 jobs in December, average annual hourly earnings rose 3.2% and the labor participation rate climbed to 63.1%.
Chart: Reuters
Credit card indebtedness rose $4.8 billion in November after increasing $9.3 billion in October. Credit card debt reached a record $1.042 trillion in November. Revolving or credit card debt has a principal amount which may be maintained by paying a minimum each month.
The loans presaged the holiday season which from credit card receipts appears to have been robust. MasterCard reported a 5.1% gain in sales on 2018. Retail sales for December will be issued by the Census Bureau on January 16th.
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