The Federal Reserve Bank of New York has published its Household Debt and Credit Report for 2014's third quarter, showing a sharp increase in borrowing on the part of American consumers. Total debt grew by $78 billion in Q3, reaching $11.7 trillion and marking the fourth increase out of the last five quarters. Household debt is up 5 percent since hitting its lowest point in the second quarter of 2013, but is still $1 trillion shy of the all-time high set six years ago.
The New York Fed says this is good news for the economy, since it signals that consumers are growing more confident. The Conference Board says consumer confidence is up 23 percent from a year ago and hit a seven-year high in October.
Mortgages and auto loans led the third-quarter growth. Mortgage debt currently stands at $8.1 trillion and car loans at $934 billion after 14 straight quarters of growth. Credit card debt has increased in each of the last two quarters, reaching $680 billion.
"Outstanding household debt, led by increases in auto loans, student loans and credit card balances, has steadily trended upward in recent quarters," said Fed senior vice president Wilbert van der Klaauw. "In light of these data, it appears that the deleveraging period has come to an end and households are borrowing more."
The only loans that fell in the quarter, as they have for the past three years, were home equity lines of credit. Overall, delinquency levels remained steady at 6.3 percent.