That stock News

WASHINGTON — A consumer borrowing increased in October from the largest amount in more than two years, led by a big increase in the category which includes student loans.

The Federal Reserve said Tuesday that consumer credit has increased at an annual rate of 3.4 billion in October, the biggest increase since July 2008 $ 5.7 billion gain. Consumer credit has also increased in September.

Force in September and October is strongly influenced by recent legislation, which makes the Government, but the primary lender to students.

3.4 Billion in overall credit increase exceeded apartment reading than economists expected. Gain translates into an increase of 1.7% and followed by an increase of 0.6% in September. Those who have been the first consecutive monthly gain since mid-2008. Consumer credit fell from 19 months straight before rising in September.

Americans have reduced their borrowing from the end of 2008, they have struggled to cope with a steep recession and high unemployment.

Analysts have said that they did not expect this situation to change in the months to come, given that unemployment in November has jumped to 9.8% and not expected to show dramatic improvements, given the slow pace of economic growth.

"Households actually obtained handguns in the gastrointestinal tract at the beginning of the great depression," said Ellen Beeson Zentner, Senior Economist at Bank of Tokyo-Mitsubishi in New York. "They had no savings precautionary and no margin on their credit cards for help through the loss of jobs and salary reductions.

Because of this, she was looking for credit card debt, the largest category of credit, to remain subdued for some time.

"While we are looking for credit back, we are not the types of growth rates, we have seen over the last 20 years, when we had a love affair with credit," she says.

The Federal Reserve credit report showed that revolving credit, category which includes credit cards, loans fell by 8.4% in October, 26th record decline in monthly consecutive.

Households were borrowing less and save more. This was a major factor together hold economic growth because it reduces consumption, which represents 70% of the total economic activity.

The category of debt which includes auto loans and student loans increased by 6.8% in October after a strong increase of 7.6% in September.

Much of this gain was powered by student loans from the Federal Government. A change in law this year gives the Government the primary lender to students. Previously, the Federal Government was the guarantor of loans for students provided by private lenders.

Some of the resistance of the last month are also auto loans increase reflecting the highest motor sales. A separate report on Tuesday showed that consumers with rock-solid credit less began to get a car loan once more lenders has loosened standards a little.

Report from Experian, shows that loans will subprime buyers has increased by 8% in the third quarter, agency of credit in the third quarter of 2009. It was the first one-year increase since 2007.

Total credit in October level stood at $ 2.4 billion, 3.1% for a year and 7.1% below the record for the consumer credit struck in July 2008.

Measurement of the Federal Reserve consumer credit covering categories such as credit card debt, student loans and auto loans. But it includes no mortgage or any other type of loan secured by real estate.

Copyright 2010 the Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

View the original article here