According to numbers released by the Federal Reserve, consumer debt is on the rise again. In March, consumer credit expanded at the fastest pace since November 2001. The increase comes from higher student borrowing and an increase in credit card use.
Outstanding consumer credit rose by over 10%, or $21.36 billion, to $2.542 trillion. Many analysts had forecast a smaller increase. The Deutsche Bank sees these numbers as an indication that the household de-leveraging process may finally come to a close soon.
The expansion in credit owes much to the shift in student loans to direct borrowing from the federal government. Loans held by the Department of Education have increased four-fold since 2008. Outstanding Federal student credit rose to $460.2 billion in March.
Although the Federal Reserve report does not include information on home mortgages or other real estate loans, it is a good indicator of consumer behavior and consumer spending.