Consumer credit in the U.S. increased more than forecast in November, led by borrowing for student loans and automobiles.
The $16 billion gain followed a $14.1 billion advance in October, Federal Reserve figures showed Tuesday in Washington. The median forecast of 34 economists surveyed by Bloomberg called for a $12.8 billion November rise.
With sustained gains in the labor market, reflected by December’s 155,000 increase in payrolls, and strong demand for student loans and cars, economists expect consumer credit to continue to grow in the early months of 2013. The ability to borrow, combined with an improved labor market, signals consumer spending, which accounts for about 70 percent of the economy, will bolster the expansion.
“Now that people have paid down their debts over the last several years, and banks are now in much stronger positions to make loans, we are seeing credit availability improve and consumers are more willing to access that credit availability,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report.
Estimates in the Bloomberg survey for consumer credit ranged from gains of $5 billion to $20 billion. The October increase was previously reported as $14.2 billion.
The report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.
Non-revolving debt, such as that for college tuition or auto purchases, climbed $15.2 billion in November, the most since June, after increasing $10.6 billion in October.
Borrowing probably continued to grow last month. General Motors Co., Ford Motor Co. and Chrysler Group LLC posted December U.S. vehicle sales gains that exceeded analysts’ estimates, completing a year of growth that helped propel the country’s economy.
U.S. deliveries of cars and light trucks climbed 10 percent for Chrysler, 4.9 percent for GM and 1.6 percent for Ford, according to company statements. The demand in the last two months of the year was boosted by customers who delayed their shopping due to Sandy or rushed to stores after their old vehicles got damaged by the superstorm.
Lending by the federal government, which is mainly for educational loans, increased by $4.9 billion in November before adjusting for seasonal variations, Tuesday’s report showed.
Revolving debt, which includes credit cards, rose by $816.9 million in November, after a $3.44 billion increase the prior month.
Households may resort more to credit cards in coming months after the payroll tax rose as a part of the Jan. 1 deal to avoid the fiscal cliff, according to Michael Englund, chief economist of Action Economics LLC in Boulder, Colorado. The levy climbed to 6.2 percent of income from 4.2 percent.
“People might be caught by surprise in January, when they see how much smaller their take-home pay is, and we might see some fuel for the consumer-credit number,” Englund said in a phone interview. “The likely pattern is that we will see some run-up in consumer credit for three or four months.”
Congress passed a budget deal including the two-percentage- point payroll tax increase earlier this month as a way to avoid the larger tax increases and spending cuts known as the fiscal cliff.
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