US consumer borrowing ison a well-worn path, as growth in student and auto loans continued to increase,while credit cards showed a version of their recent years’ pattern of apost-holiday hangover.
Increasedborrowing for cars and higher education drove January’s debt increase.Nonrevolving credit, representing mostly auto loans and student debt, grew at a6.29% annualized rate. Revolving credit, reflecting credit-card debt, fell1.57% in January, though that followed a sizeable 8.41% increase for December
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While card outstandingsshowed strong growth in December, there was apparently cardholder inclinationto pay down some of the increased borrowing on the next statement cycle. The 2014 credit card outstandings growth record was a mixed one, with quarterlygrowth varying from strong to tepid. The post December pay-down cycle hasbecome a common pattern in the post-recession environment. Consumersappear to retain some of their aversion to credit card debt learned during therecession, while showing a strong willingness to invest in education, and totake out secured loans for auto purchases deferred during the recession.
Overview by Ken Paterson, VP Research Operations for Mercator Advisory Group
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