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Consumers Borrowed More In November, But Paid Off Credit Cards

Consumer borrowing in the U.S. increased by $14.1 billion in November, but revolving credit-card debt fell by $946 million, according to a monthly report from the Federal Reserve.

The decline in revolving debt was the first drop in three months, and followed a $1.48 billion increase in October. The November increase in total credit followed a $16 billion gain in October.

Non-revolving credit, including car and education loans, was up by $15 billion in November after rising $14.5 billion in the previous month. And federal lending to consumers, which mostly entails school tuitions, increased by $5.8 billion before seasonal adjustments, after rising $5.1 billion in October.

Low gasoline prices and increased hiring have galvanized the American consumer to spend more, Bloomberg reported. Household buying, which accounts for about 70 percent of the economy, climbed at a 3.2 percent annualized pace in Q3, according to Commerce Department data released in December, as consumers splurged on new cars, appliances, televisions and clothing.

The $14.1 billion borrowing increase in November was below the median forecast of 36 economists, which called for a $15 billion advance. Estimates ranged from increases of $10 billion to $20 billion. The report does not track mortgages, home-equity lines of credit, or other real estate-backed debt.

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