News & Resources

U.S. consumer credit increases for the fourth consecutive month

Mar 13, 2011 Brian Bradley

New data from the Federal Reserve shows that consumer purchasing power continues to increase, which is a positive sign both for individuals and the economy. According to the central bank, consumer credit increased by slightly more than $5 billion in January - the fourth consecutive monthly gain. The January figure was nearly $1 billion more than the revised total of approximately $4 billion in December, according to the Federal Reserve. Economists had forecast a $3.5 billion increase for January based on credit card debt and non-revolving loans. That Bloomberg median figure was exceeded by nearly 50 percent. Analysts are pointing to steady gains in the auto industry for improved credit. "Auto sales have been doing well and today’s report is a reflection of that" Neil Dutta, an economist at Bank of America Merrill Lynch in New York, told Bloomberg. "Credit standards remain tight - we’re seeing that with credit cards - but at the margin we’re seeing some loosening, such as auto finance." Bloomberg reports that its economists forecast gains between $2 billion and $7.5 billion, following the initial report of a $6.1 billion increase in December.