As consumer confidence rises, so too does consumer indebtedness. According to the Federal Reserve, in November, U.S. consumer borrowing expanded by another $14.1 billion after a $16 billion increase in October. The gains in aggregate consumer borrowing pushed consumer debt excluding real estate loans to a record level of $3.3 trillion according to the Associated Press.
The latest data are consistent with the notion that an improving economy and stronger employment gains over the past year are rendering consumers more comfortable with added debt. While total credit card debt declined by just less than a billion dollars in November, that decline was more than countervailed by a $15 billion increase in the category that includes auto and student loans. By November 2014, borrowing was 7 percent above where it was a year prior, with auto and student loans up by a combined 8.4%.
Though credit card debt declined in November relative to October, it was still up by 3.4% on a year-over-year basis. A separate report issued by the New York Federal Reserve Bank tracks all forms of consumer borrowing including home mortgages, and indicates that total borrowing increased by nearly $80 billion during the third quarter to $11.7 trillion.
