U.S. consumer credit tops $5 trillion for first time in November

By Greg Robb

Credit growth surges at 5.7% annual rate

The numbers: Total consumer credit rose $23.7 billion in November, up from a $5.8 billion increase in the prior month, the Federal Reserve said Monday. That translates into a 5.7% annual rate, up from a revised 1.4% rise in the prior month.

That was the biggest gain since November 2022, and puts total consumer credit above $5 trillion for the first time ever. The data is not adjusted for inflation.

Economists had been expecting an $8 billion increase, according to the Wall Street Journal forecast.

Key data: Revolving credit, like credit cards, rose sharply at a 17.7% rate after a 2.7% gain in the prior month. That was the biggest gain since March 2022.

Nonrevolving credit, typically auto and student loans, rose at a 1.5% rate after a 0.9% rise in the prior month. That category of credit is typically much less volatile. The Fed's data does not include mortgage loans, which is the largest category of household debt.

Big picture: The sharp pickup in consumer credit growth was likely due to the start of the holiday shopping season, economists said.

Stepping back, consumer credit has been on a downward trend in the wake of the Fed's aggressive rate hikes. Banks have also been tightening their standards. Now that the market expects the Fed to start cutting rates, consumers might borrow at a faster pace.

Market reaction: Stocks DJIA SPX were higher in afternoon trading on Monday while the 10-year Treasury yield BX:TMUBMUSD10Y fell slightly to 4.01%.

-Greg Robb

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01-08-24 1544ET

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