Consumer Credit Has Second Biggest Jump On Record, As Student And Car Loans Soar

It will likely not come as a big surprise that at a time when US personal savings are once again declining, perhaps as a result of soaring health insurance costs, that US consumers are forced to borrow increasingly more to make ends meet. And, as expected, the latest consumer credit report confirmed this, when moments ago the Federal Reserve announced that in August, total US credit surged by $25.9 billion on a seasonally adjusted basis, smashing expectations of a $16.5 billion increase, and the third biggest monthly jump since 2001.


The spike was driven by a major jump in non-revolving credit, while revolving, or credit card, debt also spiked substantially in the last full month of summer.


Broken out, revolving credit rose by $2.9 billion...


... while non-revolving credit increased by a whopping $20 billion,the third highest monthly increase this decade.

But what was perhaps most interesting is that on a non-seasonally adjusted basis, when removing the artificial Arima-X-13 seasonal factors, August consumer credit soared by a near record $46.8 billion, an absolute outlier month, and surpassed just once in history.

So for all those who, still, erroneous claim that US consumers are deleveraging, show them this chart, because the scramble if not so much into revolving debt then certainly into government-funded auto and student loans, is unlike anything ever seen.  And speaking of just those two kinds of debt, here they are broken out: they have both never been higher.