Ahead of the Bell: US consumer borrowing
WASHINGTON (AP) — The Federal Reserve reports on consumer borrowing for December. The report will be released at 3 p.m. EST Friday.
BORROWING UP: The forecast is that consumers increased their borrowing by $12.9 billion in December, according to a survey by FactSet.
SLOW GAINS: In November, consumers increased borrowing by $12.3 billion, pushing total borrowing to a seasonally adjusted $3.09 trillion, a record level.
Over the past year, consumers have become more confident and have been willing to take on debt. Increased borrowing helps to support higher consumer spending, which accounts for 70 percent of economic activity.
The strength in borrowing has come from increases in the category that covers auto loans and student loans. Borrowing in the category that covers credit cards has been rising much more slowly.
Credit card borrowing plunged after the Great Recession as financial institutions tightened lending standards and households became more cautious about taking on high-interest debt at a time when millions of people were losing their jobs.
While credit card borrowing has been rising more recently, the gains have left this debt 17 percent below its peak of more than $1 trillion in 2008.
The measure of auto loans and student loans in November was up 8.2 percent from a year ago and had increased in every month but one since May 2010.
A separate quarterly report on consumer credit done by the Federal Reserve Bank of New York shows that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009.
The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages or home equity loans.