Jan 17, 2013 Philip Burgess
Debt collection agencies have been busy in recent months, as consumer spending has been on the rise. That isn't expected to change anytime soon, with a recent report by the Federal Reserve revealing that consumer debt increased again in November 2012.
Americans borrowed $16 billion more dollars in November as compared to October, and November's seasonally adjusted total soared to a record $2.77 trillion, a 5.2 percent jump since the beginning of the 2012. Auto and student loans once again drove the majority of this growth. Since July 2008, borrowing for automobile and student loans has increased 22.8 percent, while auto sales have reached their highest levels in five years.
At the same time, Americans are increasingly using different types of credit methods. The report revealed that non-revolving debt, which includes borrowing for automobile and student loans, grew $15.2 billion between October and November. In addition, consumer credit card spending jumped nearly $1 billion during that same time period, after dipping slightly in October.
Consumer borrowing accounts for approximately 70 percent of the U.S. economy, according to a recent article by Bloomberg News. Analysts are predicting that these growth trends will continue in 2013.
"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," said Russell Price, senior economist at Ameriprise Financial, according to the source.
In particular, auto and student loans are expected to surge forward again in the coming months. Credit card debt is projected to increase as well, albeit at a slower pace.