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Getty Images People pack the isles as they shop at a Target on Black Friday.
The numbers: Consumer borrowing accelerated in October by the second highest rate this year, according to Federal Reserve data released Friday. Total consumer credit increased $18.9 billion, up from $9.6 billion in the prior month. That’s an annual growth rate of 5.5%, which was surpassed only by July’s 6.9% gain, which was boosted by Amazon’s Prime Day promotion. Economists had been expecting a $15 billion gain in October, according to Econoday.
What happened: Revolving credit, like credit cards, rose at a 8.8% rate in October. And credit-card use in September was also revised higher.
Nonrevolving credit, typically auto and student loans, rose 4.3% in October. Nonrevolving credit is much less volatile than credit-card use.
The Fed’s data does not include mortgage loans.
Big picture: Consumers remain the key to the economic outlook given the sluggish business spending. Economists will be watching closely to see if the improvement in the labor markets in November coincided with increased spending.
The government will release retail sales data for November next Friday. Economists at Credit Suisse are forecasting a solid 0.6% gain in retail sales after a several lackluster months.
Preliminary reports on holiday shopping have been optimistic. Michelle Meyer, chief U.S. economist at Bank of America, said early sales appear to be the strongest in six years.
Read: U.S. sees hiring surge in November
Market reaction: Stocks were up sharply Friday after the unexpectedly strong job data. The Dow Jones Industrial Average DJIA, +1.21% was up over 300 points in afternoon trading.
