US consumer borrowing rose in November, led by increases in auto and student loans
WASHINGTON - Americans increased their borrowing in November, led by continued gains in auto and student loans.
The Federal Reserve said consumers increased their borrowing by $12.3 billion in November to a seasonally adjusted $3.09 trillion. That is a record level and follows an October increase of $17.9 billion.
Almost all of the November increase came from an $11.9 billion rise in borrowing for auto loans and student loans. Borrowing in the category that covers credit cards ticked up only $457.8 million after surging in October.
Credit card borrowing plunged after the Great Recession and consumers remain cautious about taking on high-interest debt. It has gradually increased to its highest level in more than three years, but it's still 16 per cent below its peak of more than $1 trillion reached in 2008.
The combination of weak hiring and meagre wage gains has left many Americans reluctant to charge their purchases.
Through November, the measure of auto loans and student loans has risen 8.2 per cent from a year ago and has increased in every month but one since May 2010. The Federal Reserve Bank of New York quarterly report on consumer credit shows student loan debt has been the biggest driver of borrowing since the Great Recession officially ended in June 2009.
But consumers are starting to open their wallets, even if they have resisted using credit cards. Auto sales ended the year strongly, while other purchases have picked up.
Consumer spending rose 0.5 per cent in November, the biggest increase in five months, according to the Commerce Department. That solid showing suggests solid economic growth in the final three months of 2013.
The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages, home equity loans and other loans.
Read more Business News
- BC chief's pay, expenses: $1MBC - 8:08 pm
- Body & truck pulled from riverVernon / N. Okanagan - 3:53 pm
- Prolific offender goes campingKelowna - 12:42 pm
- Tropical Storm Bertha forms World - 9:53 pm
|QHR Technologies Inc||1.21||-0.01|
|Anavex Life Sciences||0.262||+0.002|
|Copper Mountain Mining||2.75||-0.08|
|Sunrise Resources Ltd||0.03||-0.005|
|Mission Ready Services||0.15||0.00|
Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...
The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...
Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...