Smart Borrower Blog

Consumer Borrowing Makes Biggest Jump since 2001

Jan 11th, 2012 @ 2:37 PM by Amber Nelson

Consumers borrowed money at a higher rate in November than they have in a decade, according to the latest report from the Federal Reserve.

Total consumer borrowing grew $20.4 billion in November to $2.48 trillion, posting the largest monthly gain since November 2001 when loans increased by $28 billion. The new total is almost back up to pre-recession levels and significantly above the September 2010 decrease of $2.39 billion.

Credit card borrowing and other revolving credit accounts jumped up $5.6 billion, the largest increase since March 2008 and the third consecutive monthly gain. Auto loans also rose $14.8 billion, almost matching July’s record high.

“Credit growth is a positive sign for the recovery in that it signals increasing demand and willingness to spend,” said Paul Edelstein, an economist at IHS Global Insight in Lexington, Massachusetts, in a Reuters article.

Borrowers also took out more student loans from the government, with a $6.4 billion increase in November, registering a 31.9 percent increase from the previous year.

Overall spending has risen in six of the last nine months. The trend seems to be in response to a moderating unemployment rate and incremental improvements in the overall economy. Certainly, it is an indication that consumer confidence is growing.

Americans have also scaled back on their saving, according to the Fed report. With the onset of the recession, consumers dramatically slowed their spending and bumped up their savings, with the annual savings rate reaching above 5 percent in 2008 and remaining there until 2011. In November, consumers only put away 3.5 percent as savings, the lowest rate since December 2007.

While most of the Fed’s report is positive, a part of the spending increase and accompanying savings decrease, is likely attributed to the difficulties many consumers are facing, such as keeping up with purchases due to unemployment or wages lagging behind the rate of inflation. After-tax incomes, adjusted for inflation decreased by 2 percent between July and September last year. Without real growth in income, increased spending will not be able to continue its current course.


About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

4 Responses to “Consumer Borrowing Makes Biggest Jump since 2001”

  1. says:

    !Important! I really like your website, it’s well built and the material is very good so I’d like to ask you a question: As a website owner, have you ever wanted to get paid off of your website? Not just a few bucks a month, but hundreds or thousands of bucks every month. If you click my name you’ll learn about a money making online marketing course that offers to teach you how to make thousands of dollars per month running websites and campaigns just like this one. The video is free so just take a few minutes and watch it, I don’t think you’ll regret it. Consider this a friendly tip about one of the best internet marketing courses available. Enjoy!

  2. Enrique Kolb says:

    Thanks. Some very valuable information.

  3. Jack Studt says:

    With havin so much content and articles do you ever run into any problems of plagorism or copyright violation? My website has a lot of completely unique content I’ve either written myself or outsourced but it seems a lot of it is popping it up all over the internet without my agreement. Do you know any methods to help prevent content from being stolen? I’d certainly appreciate it.

  4. Emile Seeney says:

    This sounds like an interesting opportunity. I know I could handle this no problem. $100-200 per month is still pretty low, but as easy side income it’s still worth considering.

Leave a Reply