Total consumer credit hit $2.753 trillion and rose at an annual rate of 6.2 percent, the highest reading ever recorded by the Federal Reserve’s monthly consumer credit report known as the G. 19, Bloomberg reports.
“Uncertainty regarding the fiscal cliff may be inhibiting businesses from making bold investment decisions, but consumers have not exhibited the same degree of caution,” Dana Saporta, an economist at Credit Suisse, said, Bloomberg reports.
All categories of consumer debt rose, led by non-revolving debt, including auto and student loans, which increased 6.9 percent annualized. Outstanding non-revolving debt totaled $1.895 trillion in October.
The increase in borrowing came as American consumers cut back on spending, due in part to the aftershock of Hurricane Sandy, according to insideARM.
Credit card debt also rose for the second time in five months. Revolving debt increased $3.4 billion at an annual rate of 4.7 percent after falling nearly $2.2 billion in September. Total consumer credit card debt reached $857.6 billion in October, the second-highest reading since credit card debt picked up after a steep multi-year decline.
An uptick in the labor market could be driving the increase in American consumers’ willingness to borrow. Payrolls increased more than projected, and the unemployment rate fell in November to an almost four-year low. The economy added 146,000 jobs in November after a 138,000 increase in October, Bloomberg reports.