The Federal Reserve’s monthly report for November 2012 shows an economy in continued comeback mode. For the fourth month in a row, consumer credit has risen, posting a $16.05 billion increase in November.
In October 2012, consumer credit was up by only $14.08 billion, but it has expanded at a steady pace since the middle of 2010 – a good sign for the economy and more than predicted. However, looking at the difference between revolving and non-revolving credit gives a fuller picture of just where that credit increase is occurring. Non-revolving credit made up most of the rise in credit.
Credit card use not so strong
Revolving credit – the kind that includes credit card spending – was only up by $817 million, compared with $15.23 billion for non-revolving credit. That means more people taking out loans to attend school and buy cars rather than putting charges on credit cards.
Government student loans were up 28% over last year, although they were still below the record-high increase of 81% in September 2010. At that time, many people faced with unemployment because of the recession flooded campuses in pursuit of new degrees. People are still returning to school – and taking out loans to do so – but not at the same rate.