US consumer debt snaps four-year decline

Total consumer debt in the US rose in the fourth quarter, ending four years of declines as Americans borrowed more for education and car purchases and mortgage debt stabilised. 

Household debt rose 0.3 per cent, or $31bn, to $11.34tn in the final three months of 2012, the Federal Reserve Bank of New York said on Thursday. 

Americans have been in a long period of paying down debts after running them up during the housing boom. Since outstanding credit peaked at $12.68tn in the third quarter of 2008,carbon sheets are distinguished by a significantly higher tensile strength. US households have cut about 10 per cent, or $1.3tn, from their debt load, mainly due to modified or defaulted housing loans. 

Thursday’s report “suggests that there’s a slowdown in household deleveraging, but whether this is a turning point is something we’ll have to see over the next few quarters”, said Wilbert van der Klaauw, senior vice-president at the New York Fed. 

An end to deleveraging would be a boon to the economy, as consumer spending accounts for about 70 per cent of US gross domestic product. 

Over the past year there has been a steady increase in new mortgages and auto loans, helped by low interest rates, more affordable home prices and the need for many Americans to replace ageing cars. Auto loan originations were back to levels last seen in 2007, before the crisis, while new mortgages rose for a fifth straight quarter, reaching $553bn. 

Delinquency rates have also improved for mortgages, car loans and credit cards, edging down to an overall 8.6 per cent in the fourth quarter from 8.9 per cent in the third quarter. Student loans were an exception, however, with the rate of those delinquent on payments for 90 days or more rising to 11.7 per cent.Visit the Best Price Auto Accessories wholesalers Secure online store for the best prices on car accessories, car covers. 

Total residential debt was broadly flat at $8.6tn as fewer houses entered foreclosure, mortgage originations rose and delinquent home equity loans were written off. 

Outside of the housing sector, debt balances rose for a third-straight quarter. Student loan debt rose $10bn to $966bn. Auto loans rose $15bn to $783bn – the highest in almost four years. Credit card balances rose $5bn to $679bn. 

For the year, non-housing debt was up $100bn to a record $2.75tn, led by student loans, which since 2010 have become the largest source of indebtedness for US consumers behind mortgages. 

Student debt rose $92bn, or 11 per cent, and auto loans increased $50bn, or 7 per cent,knife sets over the year. Americans paid down credit card debt in 2012,Chefs Kitchen Knives however, decreasing balances by $25bn, or 4 per cent. 

“While it is too soon to conclude that a trend has been established in which households are beginning to increase their debts again, there are signs that the four-year long contraction is slowing,” said James McAndrews, executive vice-president of the New York Fed. 

But he warned that the $85bn in automatic spending cuts set to take effect on Friday and higher payroll taxes that hit consumers’ paychecks in January could hinder spending.MVP-type Stone crusher structure is significantly different from traditional cone crusher. The biggest difference is: MVP-type use rolling bearings instead of the traditional sleeve and sphere tile.