WASHINGTON (AP) — U.S. consumers increased their borrowing in October but at a slightly slower pace than in the previous month as credit card use slowed.
Overall borrowing rose $13.2 billion following a $15.4 billion gain in September, the Federal Reserve reported Friday. The gains have pushed consumer debt excluding real estate loans to a record level of $3.28 trillion.
The category that includes credit card debt edged up by $922 million after a rise of $1.4 billion in September. The category that covers auto loans and student loans jumped by $12.3 billion after a $14 billion increase in September.
Economists expect that the strong gains in employment seen this year may make consumers more comfortable about increasing their use of credit cards, something they cut back on sharply following the Great Recession.
The Fed's monthly consumer credit report excludes mortgages and other loans secured by real estate. A quarterly report issued by the New York Federal Reserve Bank that tracks all types of consumer borrowing shows that total household debt, including home mortgages, increased by $78 billion in the July-September quarter to $11.7 trillion.
That is still slightly below the peak for total debt of $12.7 trillion reached in the third quarter of 2008 as the Great Recession was deepening and households began to cut back on their borrowing as millions of people lost jobs.
Because of the severity of the recession, consumers have been more hesitant about adding to debt. Mortgage debt has also been slower to recover after millions of homeowners lost their homes to foreclosures and banks tightened lending standards.
But economists say that a stronger labor market may be setting the stage for increases in consumer borrowing as consumers grow more confident about the future.
The October increase in the Fed's monthly credit survey put total borrowing 6.7 percent above where it was a year ago. Auto and student loans are up 8.1 percent while credit card debt has risen a much smaller 3.1 percent.
Student loans have soared since the recession ended and this large increase has raised concerns that young Americans are being saddled with debt that will keep them from buying homes or spending as previous generations have after college.