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Consumers Rack Up $5.8B Credit Card Debt To End 2014

U.S. consumer borrowing rose by $14.8 billion in December, including a big rebound in credit-card debt during the holidays after a drop in November, according to a monthly report from the Federal Reserve released Friday (Feb. 6).

The $5.8 billion increase in revolving credit-card debt was the biggest jump in eight months, and followed a $945 million decline in November.

The December rise in total credit followed a $13.5 billion gain in November (revised downward from the $14.1 billion increase the Fed originally reported last month). For the full year of 2014, total consumer borrowing rose 6.9 percent to $3.3 trillion, after a 6 percent rise in 2013.

Non-revolving credit, including auto and education borrowing, was up by $9 billion in December after a $14.4 billion gain in November (revised down from $15 billion). That was the lowest increase in non-revolving credit since February 2012. Federal lending to consumers, which mostly consists of student loans, rose $5.1 billion after a gain of $5.8 billion in November.

For all of Q4, student loans climbed to $1.32 trillion from $1.31 billion in Q3, while borrowing for car purchases rose to $955.5 billion in Q4 from $943.8 billion in Q3.

Lower gas prices and continued improvements in the job market kept consumers spending during December, Bloomberg News reported. Household purchases rose in Q4 at the fastest pace in nearly nine years, according to Commerce Department data. Meanwhile, automobiles sold at a seasonally adjusted 16.8 million in December, dropping from 17.1 million in November, according to data from Ward’s Automotive Group.

In a separate report on Friday, the Labor Department said payrolls increased by 257,000 in January. Combined with upward revisions to November and December, which added 147,000 more jobs than initially reported, the three-month period showed the largest three-month jobs gain in 17 years. Wages also increased by the most since 2008, just after the start of the recession, Bloomberg reported.

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