Jan 8th, 2014 @ 1:54 PM by Amber Nelson
Americans are starting to feel more confident in the economy these days, but only by a little bit. Consumer borrowing rose in November by its slowest pace in six months, according to a recent report from the Federal Reserve Bank of New York.
Total U.S borrowing grew by a seasonally adjusted 4.8 percent to a total of $3.09 trillion. That’s an increase of $12.3 billion; borrowing rose a downwardly-revised $17.9 billion in October, by contrast. The gain is weaker than most analysts expected with the average forecast calling for a $15 billion increase.
Most of the gain was from growth in non-revolving credit, with things like student loans and auto financing. Non-revolving credit jumped 6.4 percent in November, compared with a 0.6 percent increase in revolving credit, represented mostly by credit card spending.
Student loan borrowing has consistently been the biggest category for consumers since the Great Recession as Americans have considered student debt one of the safest liabilities. Federal government student loans increased by $6 billion in November, up from October’s $5.2 billion increase. Auto lending has also picked up in the last few years, with U.S. car sales rising 7.6 percent in 2013, but credit card borrowing has yet to make serious headway toward its pre-Recession levels. Total credit card borrowing is still 16 percent its 2008 peak.
Weak income growth and the sluggish movement of the high unemployment rates have kept consumer’s spending and borrowing in check, as proceed with financial caution until the economy is more robust. Economists do predict that borrowing will gradually rise in 2014 as the job market becomes more stable.
The Federal Reserve report is a survey of student loans, auto loans and credit card debt, but it does not include any loans related to real estate, including home mortgages.About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.