The numbers: U.S. consumer borrowing accelerated in November but consumers continued to avoid using their credit cards, according to Federal Reserve data released Friday.
Total consumer credit increased $15.3 billion in November, 1.3% more than in October. That’s an annual growth rate of 4.4%,
Economists had been expecting a $9 billion gain, according to the Wall Street Journal forecast.
What happened: Revolving credit, like credit cards, fell a slight 1% in November after 6.7% decline in the prior month. This is the eighth decline in the past nine months.
However, nonrevolving credit, typically auto and student loans, rose 6.1% after a 3.8% rate in the prior month. This category of credit is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth.
The data does not include mortgage loans, which is the largest category of household debt.
Big picture: Consumers will remain cautious as long as the pandemic continues to ravage the country. With consumers staying home, and government sending out relief checks to millions, the nation’s savings rate has risen sharply to close to 13%. Economist think that this might fuel growth once vaccines are widely available. Economists expect credit-card usage picked up in December ahead of the Christmas holiday.
Market reaction: The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.26% was down slightly in late afternoon trading in the wake of a weak December jobs report.