Consumer credit surges

U.S. consumer credit surged 10 percent in November, representing its largest jump in a decade and indicating a positive signal for the economy.
Outstanding consumer credit rose by $20.37 billion during November, which was the biggest gain since November 2001 and close to three times the median forecast in a Reuters poll. Revolving credit, which mostly measures the use of credit cards, rose for the third straight month, with an increase of $5.60 billion, Reuters reports.
"Credit growth is a positive sign for the recovery in that it signals increasing demand and willingness to spend," Paul Edelstein, an economist at IHS Global Insight in Lexington, Massachusetts, said, according to Reuters.
Edelstein said there may be a risk that the credit growth was a sign that chronic unemployment had more people turning to credit to fund expenditures that were necessary.
The consumer credit increase was the 13th in 14 months. Non-revolving credit, including auto and student loans, rose a seasonally adjusted $14.78 billion in November. Lending by the government to students seemed to be a significant factor in the $6.4 billion increase. Government loans to students rose 31.9 percent over the 12 months through November, Reuters reports.
There are some signs, however, that the rise in student lending since the last recession is tapering off as year-over-year increases in student lending peaked at 78 percent in September 2010. The increases have trended lower since that time.

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