Recent data from the Federal Reserve reveals a concerning trend in American consumer credit, with credit card debt continuing to rise. In October, U.S. consumer credit increased from $5.093 trillion in September to $5.113 trillion, reflecting a notable annual growth rate of 4.5%, up from just 0.8% the previous month. Specifically, revolving credit, which primarily consists of credit card debt, surged from $1.359 trillion to $1.374 trillion, marking an alarming annual growth rate of 13.9%. Meanwhile, nonrevolving credit, including loans for cars and education, saw a modest increase of 1.1%. Compounding these issues, the Federal Reserve Bank of New York's Credit Access Survey indicated that consumers are facing greater challenges in obtaining credit for major purchases like auto loans and mortgages, particularly among those with lower credit scores. Despite a rise in consumer sentiment, driven by perceptions of favorable buying conditions, concerns about inflation and potential tariffs loom large, creating a complex economic landscape for American consumers.
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