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U.S. Consumer Borrowing Cools on Drop in Credit-Card Balances

U.S. Consumer Borrowing Cools on Drop in Credit-Card Balances

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U.S. consumer borrowing increased less than forecast in November as outstanding balances on credit cards and other revolving debt declined by the most in eight months.

Total credit rose $12.5 billion from the prior month, after a revised $19 billion gain in October that was the largest in three months, Federal Reserve figures showed Wednesday. The median estimate in a Bloomberg survey of economists called for a $16 billion increase in November. Revolving debt outstanding declined $2.4 billion.

The pace of credit growth shows that despite the lowest jobless rate in five decades, moderate wage gains and elevated confidence, Americans are taking care not to overextend themselves. As businesses cut back on investment and manufacturing struggles, the nation's economy has become that much more dependent on consumers' willingness to spend.

The report also showed non-revolving credit, which includes auto and school loans, increased $14.9 billion in November, the most in three months. Lending by the federal government, which is mainly for student loans, increased $2.1 billion before seasonal adjustment.

Total credit expanded at an annual rate of 3.6% in November after growing 5.5% the month prior. The Fed's report doesn’t track debt secured by real estate, such as home mortgages.

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