Stepped-up borrowing for cars and schooling drove consumer credit up $17.8 billion in January, according to data from the Federal Reserve. At $2.5 trillion, consumer credit is nearly on par with the pre-recession borrowing level.
Specifically, the Fed-monitored category comprised primarily of auto and student loans increased $20.7 billion ― the biggest jump since November 2011. The gain was offset by a $2.9 billion decline in credit card borrowing.
While economists consider the higher debt level as a sign that consumer confidence is being restored, they worry that consumers are borrowing more at a time when wages are growing slower than the rate of inflation.
Matthew, thanks for your post. Forgive me, but what exactly do you mean by “GMAC as the missing link”? Do you mean GMAC is the linchpin to the new GM’s success? If so, please elaborate on that. Do you see GMAC with its ability to issue AAA-rated debt as funding the new GM with cheap capital?