By Vicki Needham - 01/07/11 09:53 PM EST
Consumers increased their borrowing in November behind a jump in student loans, while credit card debt continued to shrink.
Overall, consumer borrowing rose $1.3 billion or by 0.7 percent, to $2.4 trillion, following a revised increase of $7 billion in October, up 3.5 percent and well above the initial 1.7 percent estimated increase, the Federal Reserve said Friday.
As borrowing rose for the second straight month following 20 months of declines, consumers also continued to pay off their debt and add to their savings during the economic downturn and while the economy slowly recovers.
For the 27th straight month in November, consumers continued to pay off their revolving debt, such as credit cards, while auto and student loan borrowing increased by $5.6 billion or 4.2 percent to $1.61 trillion.
The federal government continued to provide a growing number of students loans.
Credit card use decreased $4.2 billion, or 6.3 percent, to $796.5 billion, continuing a downward trend that started August 2008, the report showed.
High unemployment has hampered consumer spending, although shoppers returned to stores during the holidays, a positive sign for the economy as the recovery picks up pace.
The report doesn't included figures on mortgages or home equity lines of credit.