WASHINGTON (3/8/13)--The nation's consumers borrowed more than expected during January, increasing their debt by a 7% annual rate, or $16.15 billion, to more than $2.795 trillion, said the Federal Reserve in its Consumer Credit report released Thursday. Credit unions also saw borrowing increase--by $2.1 billion--to $245.7 billion.
Economists surveyed by Bloomberg had forecast a median $14.7 billion gain in January (Bloomberg via MoneyNews.com March 7). That hike in borrowing means consumers took out more auto and student loans, and increased their credit card debt. The report does not cover mortgage loans or home equity lines of credit.
The report indicates that many consumers continued to replace cars that are aging or that were damaged during October's Hurricane Sandy, even as paychecks were hit by the end in January of the payroll tax break, said Dow Jones Newswires (FOXBusiness.com March 7).
The $2,795.3 trillion borrowed compares with $2,779.2 trillion borrowed in December and $2.665 trillion in first quarter 2012. Credit unions saw members borrow $245.7 billion in January, a $2.1 billion increase from $243.6 billion in December. Members took out $223 billion in loans from credit unions during first quarter 2012, said the Fed's report.
Revolving credit, or credit card debt, for January totaled $850.9 billion, or an increase of $1 billion from December. A year earlier, consumers borrowed $849 billion. Credit union members charged or borrowed $39.4 billion, roughly $5 million more than in December from their credit unions. In first quarter last year, they had borrowed $36.4 billion.
Nonrevolving credit, which centers on auto lending and student loans, increased 10% annually, to more than $1.944 trillion in January. That is up from $1.928 trillion in December and $1.816 trillion in first quarter 2012. January was the third consecutive month that nonrevolving credit has risen by at least 9%, according to Dow Jones.
Auto loans and student loans taken out at credit unions totaled $206.3 billion, a $1.5 billion increase from December's $204.8 billion. That compares with $186.6 billion they borrowed from credit unions during first quarter 2012.