Consumer Credit in U.S. Rose Less Than Forecast in October

Facebook Twitter Google+ LinkedIn Save Consumer borrowing rose less than forecast in October as Americans tempered their credit-card use ahead of the holiday-shopping season. The $13.2 billion gain in credit was the smallest in a year and followed a revised $15.4 billion advance in September, the Federal Reserve reported today in Washington. The median forecast in a Bloomberg survey of 33 economists called for a $16.5 billion increase. Households wary of taking on too much debt are being deliberate in using their credit cards to make purchases. At the same time, a faster pace of hiring and a pickup in wages are prompting Americans to take advantage of low borrowing costs to buy cars. “The trend has cooled off in recent months following a period of stronger growth in credit earlier in 2014,” Daniel Silver, an economist at JPMorgan Chase & Co., said in an e-mail to clients. Still, the figures “continue to show a much stronger growth trend for non-revolving credit than revolving credit through October.” Estimates (CICRTOT) in the Bloomberg survey ranged from increases of $12 billion to $20 billion. The report doesn’t track mortgages, home-equity lines of credit and other debt secured by real estate. Another report today showed payrolls rose last month by the most in almost three years and hourly earnings registered the biggest gain since June 2013. Such progress may help stoke the consumer spending that accounts for almost 70 percent of the economy. Revolving credit, which includes credit-card balances, rose $922 million, less than the $1.4 billion gain in September, today’s figures showed. Non-revolving loans, including borrowing for vehicle purchases and college tuition, rose $12.3 billion in October, the Fed said. Federal government lending to consumers, made up mostly of student loans, climbed $5.1 billion from the previous month before adjusting for seasonal variations. Auto sales advanced in November at a 17.1 million annualized rate from 16.4 million a month earlier, according to data from Ward’s Automotive Group. In August, purchases ran at a 17.5 million pace, the strongest since January 2006. Faster employment is providing Americans with the means to keep spending. Payrolls rose by 321,000 in November and the unemployment rate held at a six-year low of 5.8 percent, the Labor Department’s report showed today. At the same time, wages climbed 0.4 percent from a month earlier. To contact Bloomberg News staff for this story: Danielle Trubow in Washington at dtrubow@bloomberg.net To contact the editors responsible for this story: Carlos Torres at ctorres2@bloomberg.ne