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Nov. consumer credit jump biggest in decade

By Greg Robb, MarketWatch –

WASHINGTON — U.S. consumers increased their debt in November by the most in a decade, with auto, student and credit-card borrowing all advancing.

Consumer credit rose a seasonally adjusted $20.4 billion, the Federal Reserve reported Monday. Monthly debt rose at a 10 percent annual rate in November, a much faster pace than had been expected by Wall Street economists.

All types of credit gained in the month.

Most significantly to economists, Credit-card debt jumped by $5.6 billion, or 8.5 percent, in the month. This is the biggest jump since early 2008.

Troy Davig, an economist at Barclays Capital, said the report suggests that banks are easing credit standards.

Davig said it remains to be seen whether the data is good news for consumers.

On the one hand, the surge in credit might suggest that consumers are more willing to take on debt. But it could also mean that income is a little less than consumers want it to be, he said.

Thomas Simons, an economist at Jefferies & Co. Inc., said in a research note he wanted to see December and January credit-card debt data before concluding that the weak trend in credit-card debt of the past three years has been reversed.

“The gain could also be the result of earlier Christmas shopping than in prior years,” Simons said.

The non-revolving category of debt, such as auto loans, personal loans, and student loans, rose $14.8 billion, or 10.7 percent, in November.

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