U.S. Consumer Credit Climbed by $19.3B in Dec.

[Javaman]

http://www.bloomberg.com/news/2012-02-07/u-s-consumer-credit-climbed-by-19-3b-in-dec-.html

Consumer borrowing in the U.S. rose more than forecast in December, driven by demand for auto and student loans.

Credit increased by $19.3 billion to $2.5 trillion, Federal Reserve figures showed today in Washington. The gain topped the $7 billion median forecast of economists surveyed by Bloomberg News and followed a $20.4 billion advance the prior month.

Consumers “are willing to take on this debt because there is some increasing degree of confidence in the economy,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who projected credit would climb by $15 billion, the highest in the Bloomberg survey. “Consumers over the past several years have done a pretty good job of repairing their balance sheets.”

An improving job market may be giving households the courage to take on more debt in order to sustain spending, which accounts for about 70 percent of the economy. At the same time, increasing dependence on credit may be an indication the gains in employment have yet to push wages high enough to single- handedly give consumers the means to keep shopping.

more at link...

[mucifer]

1. Richard Cordray has his work cut out for him.

[On the Road]

2. It Was Less Than a Percent, But At Least It's Growing

More credit = larger money supply

Money x velocity = GDP

That credit goes directly into economic growth. During a boom, there is a risk of growth being too rapid and of consumers getting overextended. But right now, it's needed to get the economy moving. And actually, 0.8% added to GDP growth is enormous.