The $11.4 billion increase followed an $18.4 billion increase in August. A Bloomberg survey of 34 economists predicted a $10.2 billion increase in September, Bloomberg reports.
Improving labor and housing markets may be making consumers more confident about taking on additional debt. The economy added 148,000 jobs in September and 171,000 jobs in October. Payroll growth averages also increased in the third quarter to 174,000 compared to 67,000 in the previous quarter.
“It’s pretty clear that consumer confidence has risen,” Russell Price, a senior economist at Ameriprise Financial, Inc., said, according to Bloomberg. “I think what’s really driving that improvement in consumer confidence is that average Americans are seeing the value of their homes now recover somewhat or rebound somewhat after four or five years of steady declines.”
Non-revolving debt, including debt for college tuition and auto purchases, climbed by $14.3 billion in September following a $14.1 billion increase in August. Cars and small trucks sold at the fastest rate since March 2008.
Revolving debt, including credit cards, fell by $2.9 billion in September after a $4.3 billion increase, though revolving credit fell in three of the four months leading up to September.
“Credit card spending is the easiest portion of consumer spending to contain, because it’s revolving and because many of those related expenses are discretionary,” Guy LeBas, the chief fixed-income strategist at Janney Montgomery Scott, LLC, said, Bloomberg reports.