Consumer debt rose more than $16 billion during the month of November, a 7 percent increase from October that was driven largely by auto and student loans, the Federal Reserve announced Tuesday afternoon.
Only 5 percent of the credit increase was from revolving credit, which includes credit cards. In addition, consumers used their credit cards more sparingly through the month of November, a possible sign of fear among consumers.
The expansion in student loans is particularly worrisome to economists. Last quarter, the default rate on student loans climbed to a record-high 11 percent, reaching nearly a $1 trillion — 85 percent of which is held by the government. (RELATED: Student loan delinquency hits all-time high)
Gallup’s U.S. Economic Confidence Index showed U.S. consumer confidence still down following the fiscal cliff deal. Only 16 percent of Americans say the economy is doing “excellent” or “good,” and 57 percent of Americans say that the economy is getting worse.
“As lawmakers in Washington strained to finalize a deal to avert the fiscal cliff, Americans became less confident in the economy,” Gallup writes.”[L]ingering concerns could keep confidence from improving much, as happened in September and October 2011, after the debt ceiling debate.”
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