Americans Went Credit Crazy in November—And That's a Good Thing Americans Went Credit Crazy in November—And That's a Good Thing
Social Innovation

Americans Went Credit Crazy in November—And That's a Good Thing

by Tim Fernholz

January 14, 2012


Americans got back into borrowing in a big way in November, wildly exceeding forecasters' expectations. Consumer borrowing grew 10 percent, the largest monthly increase since 2001, pushing credit expansion back toward its pre-crash trend and giving more credence to hopes of a stronger economy in 2012.

But many economists say this is a good sign: After two years of deleveraging, we should be seeing reasonably-used credit expand—our economy and population have been growing in the same period. Borrowing per person is still lower than before the recession, which should help alleviate concerns about an indebted populace, but credit growth often indicates the start of economic growth, especially in a consumer-spending driven economy like ours.  

November’s spending is likely part of the reason we’ve seen other good economic indicators in the New Year, like more new jobs and manufacturing. The signs are accumulating—this could be the start of a virtuous cycle of economic growth.

Photo via (cc) Flickr user 401k

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Americans Went Credit Crazy in November—And That's a Good Thing