LIVE MARKETS-Charging into the holidays: Consumer credit outstanding

Updates to 10:55 EST

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CHARGING INTO THE HOLIDAYS: CONSUMER CREDIT OUTSTANDING

U.S. consumers appear to have exercised a bit of caution in the approach to the holiday shopping season.

Late Friday, the Federal Reserve released its outstanding consumer credit report USCRED=ECI, which showed American consumers - responsible for around 70% of the U.S. economy - increased their debt by $9.18 billion in October.

That marks a 16.6% deceleration from September and lands $1.32 billion to the south of consensus.

Peeking under the hood, big-ticket items such as auto loans and tuition - or non-revolving credit - was responsible for the slowdown, rising by 1.2% after gaining 2.1% the previous month.

Revolving credit, which includes credit card debt, actually picked up, rising 4.9% compared with September's 4.0%.

The bifurcation of the U.S. consumer has gained some scrutiny in recent months, evidenced by survey data from the Conference Board and the University of Michigan, among others. It shows wealthier Americans continue to spend, while those at the lower end are being pinched by rising costs.

Total outstanding revolving credit is at $1.32 trillion, off 2.5% from where it was a year ago, and with consumer expectations wallowing near COVID-era lows and a saving rate (the unspent share of disposable income) sitting at a paltry 4.7%, the worry is that lower income consumers are increasingly putting essentials on plastic.

(Stephen Culp)

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