WASHINGTON (AP) — Americans felt more confident about the economy in September and likely stepped up borrowing.
Economists forecast consumer borrowing rose by $ 10.3 billion in September from August, according to a survey by FactSet. The Federal Reserve will release the report at 3 p.m. EST Wednesday.
In August, consumers increased their borrowing by $ 18.1 billion. It was the largest increase in three months. Americans borrowed more in all major categories.
The increase brought total consumer debt to $ 2.73 trillion, or 5.5 percent above a recent peak reached in July 2008. The figure excludes mortgages and other housing-related debt.
Consumer confidence has jumped to the highest levels in nearly five years, surveys have shown. And Americans increased their spending in September at twice the rate that their income grew, suggesting they may have borrowed more money to make up the difference.
Still, consumers have been using credit cards much less since the 2008 credit crisis. Four years ago, Americans had $ 1.03 trillion in credit card debt, an all-time high. In August, that figure was 17 percent lower.
During the same period, student loan debt has increased dramatically. The category that includes auto and student loans is 20.3 percent higher than in July 2008.
In the April-June quarter, student loans totaled $ 914 billion, according to a report from the Federal Reserve Bank of New York. That is nearly 50 percent higher than the July-September quarter of 2008.
Much of the increase in student loans is because of high unemployment, which has led many Americans to go back to school.
Overall, Americans’ finances have been improving. Low interest rates are also helping. The percentage of after-tax incomes that Americans are using to pay interest on all debt, including mortgages, fell to 10.7 percent in the second quarter. That’s down from 14 percent at the end of 2007, when the recession began.
Economy News Headlines – Yahoo! News
Ahead of the Bell: US Consumer Credit
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