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Economic Report: U.S. consumer borrowing continues to grow at solid rate in October

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The numbers: Total consumer credit rose $27.1 billion in October, up from a revised $25.8 billion gain in the prior month, the Federal Reserve said Wednesday. That translates into a 6.9% annual rate, up from a revised 6.6% gain in the prior month.

Economists had been expecting a $26 billion gain, according to the Wall Street Journal forecast.

Key details: Revolving credit, mainly credit cards, rose 10.4% in October after an 8.2% gain in the prior month.

Nonrevolving credit, typically auto and student loans, rose 5.8% down from a 6.1% growth rate in the prior month. This category of credit is much less volatile. 

The Fed’s data does not include mortgage loans, which is the largest category of household debt.

Big picture: Credit card balances increased 15% over the past year ended in September, according to separate New York Fed data. This is the largest increase in in more than 20 years.

Economists are hotly debating the growth of consumer credit. Some see households under pressure from a surge in inflation, forced to use high interest loans to stay afloat. Other note that, on the aggregate, households are in good shape relative to the Great Recession. But the New York Fed also noted that delinquencies are rising.

The latest reading on consumer spending has been strong.

Market reaction: Stocks
DJIA,
+0.00%

 
SPX,
-0.19%

were trading lower on Wednesday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.423%

was down to 3.41%.

Bond Report: 10-year and 30-year Treasury yields touch lowest levels in 3 months as investors watch oil slump for U.S. recession signals

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