Federal Reserve Chairman Ben Bernanke testifies in Washington before… (J. Scott Applewhite / Associated…)
The amount of money U.S. consumers owe continued to rise in April as Americans took on more debt to pay for big-ticket items such as college and cars.
Total consumer credit outstanding rose $6.5 billion, an annualized 3.1%, according to a report from the Federal Reserve. That followed an increase of $12.4 billion in March.
The increase occurred even as consumers paid down credit card debt. Revolving debt outstanding, which includes mostly credit cards, fell $3.4 billion in April.
At the same time, non-revolving debt, which includes financing for school and cars, increased $10 billion, its largest gain in three months. The Fed report does not include home loans.
Credit Suisse shows student loans skyrocketing in the last several years. “They’ve been exploding," said Dana Saporta, director of U.S. economics research at Credit Suisse, "but this month we do believe some of it was auto loans as well.”
The overall credit increase was smaller than expected, indicating waning confidence in the U.S. economy compared with earlier in the year.
This comes after a month of mostly negative economic indicators, including a dismal employment report from the Labor Department and a weakening consumer confidence index from the Conference Board.
If people were feeling better about the economy, they would be putting more purchases on credit cards, Saporta said. “We would feel more optimistic if credit cards and auto loans were increasing, because that would indicate that consumers were feeling more confident about the labor market.”
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