U.S. Consumer Borrowing Increases

November 15, 2013
Wall Street Journal 

Americans increased their borrowing in the third quarter -- a trend that could boost the economy -- while at the same time the nation's student loan tab also surpassed $1 trillion. According to Federal Reserve Bank of New York figures released on Nov. 14, outstanding household debt -- including home loans, credit cards, auto loans, and student loans -- spiked $127 billion between July and September to $11.28 trillion. Mortgage balances, the biggest chunk of household debt, grew by $56 billion from the second quarter; while Americans upped their auto-loan balances by $31 billion, their student loan debt by $33 billion, and their credit card debt by $4 billion.

New York Fed economist Donghoon Lee attributed consumers' increased comfort level with debt to the fact that foreclosures and bankruptcies are finally easing up. And the report suggests that Americans are doing a decent job of keeping up with their bills, noting that the mortgage delinquency rate was down to 4.3 percent in the third quarter from 4.9 percent in the second. Student loan debt is the biggest concern for observers, however. It now comprises 9 percent of all U.S. consumer debt, up from just 3 percent a decade ago.

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