Consumer Credit Jumps, But.....

Where is Americas anemic growth coming from? A report released Monday by the Federal Reserve shows that U.S. consumers increased their debt in March by a seasonally adjusted $21.3 billion. This is the seventh straight monthly gain in consumer borrowing. The increase in March was the largest since November 2001 and was double the roughly $10 billion gain expected by Wall Street economists. The bulk of the increase came from non-revolving debt such as student loans, auto loans and personal loans.

These three categories combined for a $16.2 billion jump in March. Credit card debt rose by $5.1 billion in the month after declining  $2.3 billion in February. Consumer credit increased at a 7.75% annual rate in the first quarter. It is not a good sign that Americans are fueling their spending by taking on new debt while income from jobs continues to lag. The student loan category is highly government concentrated, 80% of student loans are made by the government.