U.S. Consumer Debt Rises on More Car, School Loans

 Purdue Mall on the campus of Purdue University in West LafayetteBy MARTIN CRUTSINGER

WASHINGTON (AP) - U.S. consumers borrowed more in November to buy cars and attend school, but stayed cautious with their credit cards.

The Federal Reserve said Tuesday that consumers increased their borrowing in November by $16 billion from October to a seasonally adjusted record of $2.77 trillion.

Borrowing that covers autos and student loans increased $15.2 billion. A category that measures credit card debt rose just $817 million.

The sharp difference in the borrowing gains illustrates a broader trend that began after the Great Recession. Four years ago, Americans carried $1.03 trillion in credit card debt, an all-time high. In November, that figure was 16.5 percent lower.

At the same time, student loan debt has increased dramatically. The category that includes auto and student loans is 22.8 percent higher than in July 2008. Many Americans who have lost jobs have gone back to school to get training for new careers.

The November increase also reflected further gains in auto sales, which grew 13.4 percent in 2012 to top 14 million units for the first time in five years. The need to replace vehicles destroyed by Superstorm Sandy may have also contributed to the gain.

Consumer spending rebounded in November, helped by lower gas prices and solid job growth that carried over into December. Employers added 155,000 jobs in December and 161,000 in November.

Steady hiring may have encouraged consumers to keep borrowing and spending, despite tense negotiations to resolve the fiscal cliff.

Still, some analysts expect borrowing and spending may have slowed in December as those budget talks in Washington intensified. Congress and the White House didn't reach a deal to avert sharp tax increases until Jan. 1. And they delayed tougher decisions about spending cuts for another two months.

Consumer confidence fell in both November and December, which may slow spending in December. Consumer spending drives roughly 70 percent of economic activity.

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button.eyes

Our younger generation will have a rough go. I read a similar article about this. Credit cards area really problem and without it we can't buy anything anymore. Also keep your financial house in order and if you get into trouble clean up your credit. Use companies like Lexington Law to help you if you can't do it yourself.

January 23 2013 at 8:12 PM Report abuse rate up rate down Reply
1 reply to button.eyes's comment
chris.markus

Thanks for the advice. I have a lot of friends with bad credit. I will pass along the information. I want to make sure the company has a track record of success. I believe there are some promos with their credit repair as well.

January 23 2013 at 8:25 PM Report abuse rate up rate down Reply
Harry Piels

Students are enslaving taxpayers (the forty percent who pay)., They take fluff courses and often reneg on loans. Then the government bails them out .

That hurts when you've worked and slaved to pay off your own kid's bills !

January 09 2013 at 8:27 AM Report abuse +4 rate up rate down Reply
1 reply to Harry Piels's comment
gmydogbud

Folks like us should have learned by now that doing the right thing in this country does not pay. Work hard, do without, pay your bills and our government does not even know that you exist, except to pay taxes!!

January 13 2013 at 4:25 PM Report abuse +1 rate up rate down Reply
cpo1514

HP article states....."At the same time, student loan debt has increased dramatically. The category that includes auto and student loans is 22.8 percent higher than in July 2008. Many Americans who have lost jobs have gone back to school to get training for new careers."

Does this mean the USA (under Obama) now owns student loan debt that will never be repaid??/ WTF ???/ Where is the Future??????

January 08 2013 at 4:00 PM Report abuse +8 rate up rate down Reply