The Federal Reserve Board observed a steep increase in U.S. consumer credit in November, particularly for nonrevolving accounts. There was $14.8 billion in additional borrowing among nonrevolving debt – an annualized increase of 10.7 percent – which now totals $1.68 trillion. Revolving debt, meanwhile, increased 5.6 billion, or 9.5 percent, to $789.3 billion. Overall debt levels are now just shy of $2.5 trillion and have increased in every month in 2011 except August.
Individual interest rates remain low, with the average rate for a 48-month new car loan being 5.45 percent. This is down from the 5.90 percent average in the third quarter of 2011. For credit cards, the average rate in November was 12.36 percent.
Commercial banks remain the largest holders of consumer credit, with $1.08 trillion in credit outstanding. Finance companies and the federal government follow with $502.5 billion and $416.3 billion, respectively. The largest increase occurred among student loans outstanding (e.g., the federal government), which grew from $409.9 billion to $416.3 billion.
Chad Moutray is chief economist, National Association of Manufacturers.