Shoppers Go on Post-Holiday Spree and Say ‘Charge It’
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WASHINGTON — U.S. consumers went on a credit-buying spree in January, a Federal Reserve report showed Friday, as installment purchases shot up by $14.7 billion.
It was the strongest increase in credit-buying in more than three years, since a $16.3-billion jump in September 1995, and was nearly five times the revised $3.1-billion December increase, originally estimated at $7.3 billion.
The January consumer credit increase far exceeded Wall Street economists’ forecasts for a $5.2-billion rise. Every category of credit jumped sharply, including credit card debt and loans to buy new cars.
New-car loans jumped by $6.5 billion, following a $4.4-billion increase in December. Revolving, or credit card, debt soared $5.7 billion after a $3.9-billion increase in December.
Other credit, a catch-all that includes consumer bank loans such as those for mobile homes and education expenses but not real estate mortgages, climbed $2.5 billion in January, partly reversing a $5.2-billion decline in December.
With the economy expanding and unemployment close to a 30-year low, consumers have been spending money at the fastest pace in 14 years. Some of that spending, of course, has been financed by credit cards and other loans, and some economists caution consumers may be taking on too much debt.
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