New Federal Reserve data shows American consumers’ credit card debt continuing to climb.
The data, released Friday (Dec. 6), showed U.S. consumer credit climbing from $5.093 trillion in September to $5.113 trillion in October. Consumer credit on a seasonably adjusted basis increased at a 4.5% annual rate for October, up from 0.8% the month before.
Meanwhile, revolving credit, which includes credit card debt, rose from $1.359 trillion in September to $1.374 trillion in October, climbing at an annual rate of 13.9%. The rate for nonrevolving credit — things like car loans and student debt — crept up 1.1% in October compared to 0.5% in September to $3.379 trillion.
Data last month from the The Credit Access Survey released by the Federal Reserve Bank of New York showed that consumers were having greater trouble accessing credit for auto loans, and mortgages, and for those with low credit scores.
“Reported rejection rates for credit cards, mortgages, auto loans, credit card limit extension applications and mortgage loan refinance applications all rose in 2024,” the New York Fed said in a press release that accompanied the data.
The Fed’s latest data was released the same day at the the latest edition of the University of Michigan’s Consumer Sentiment Index, which shows consumers positive about near-term current economic conditions, while also cognizant of near-term inflation prospects, which are creeping up.
“A surge in buying conditions for durables led Current Economic Conditions to soar more than 20%. Rather than a sign of strength, this rise in durables was primarily due to a perception that purchasing durables now would enable buyers to avoid future price increases,” said Surveys of Consumers Director Joanne Hsu.
Those anticipated price hikes can, in part, be tied to worries about the impact of potential tariffs scheduled to be imposed by the incoming Trump administration. The university’s report noted that there is a divergence between expectations from Democrats (where assessment of overall conditions are on the decline) and Republicans (where expectations are increasing).
As covered here Friday, the headline number detailed that consumer sentiment index climbed from 71.8 points in November to 74 points in this preliminary December data. The consensus had anticipated a 72 reading, and the latest tally shows the highest level recorded in seven months.
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