Consumer Borrowing Jumped in November as Confidence Improved

Borrowing rose by $20.4 billion in November, the most in a decade, the Federal Reserve reported on Monday.

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In a sign that Americans are gaining confidence in the economy, credit card debt rose $5.6 billion in November, the most since March 2008, while a category that tracks auto loans increased $14.8 billion, close to July’s increase, which was the biggest since February 2005.

Credit tumbled and the savings rate climbed during and immediately after the recession, but November marks the third consecutive monthly increase in overall borrowing in the United States.

Consumer confidence surveys improved and holiday sales were healthy as lower unemployment and an improving economy prompted Americans to step up spending.

However, wages did not keep pace with inflation last year, and many Americans are tapping into their savings or borrowing more as a result.

The savings rate in November was just 3.5 percent — the lowest since the recession began in December 2007. Borrowing has increased in six of the last nine months.

Though Americans saved less than 3 percent of their after-tax income in the three years leading up to the recession, the annual savings rate rose above 5 percent in 2008 and stayed above that level until 2011, while consumer borrowing fell for 26 consecutive months, from October 2008 to December 2010.

The Federal Reserve’s borrowing report covers auto loans, credit cards, and student loans, but excludes mortgage, home equity loans, and any other loans tied to real estate.

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