US consumer borrowing sees biggest hike in 10 years

In another sign of a strengthening US economy, consumer borrowing in November jumped by $20.4 billion, the biggest increase in a decade, as more Americans showed they were confident enough to borrow for purchases and more banks were wiling to lend to them, Bloomberg reported.

The mounting evidence of a US recovery, including jobs figures last week showing sustained growth in hiring, could add to the difficulties of Republican presidential candidates vying to take on Barack Obama in November's presidential elections by undermining claims that the incumbent has failed to improve the lot of American workers.

Speaking in New Hampshire on the last day of campaigning for the state's presidential primaries, GOP front-runner Mitt Romney said today of President Obama: "I don't think he's a bad guy. I just don't think he understands how the economy works."

Figures released today by the US Federal Reserve showed consumer borrowing valued at $2.48 trillion, a figure almost twice as large as the the highest forecast of 31 economists surveyed by the financial news agency.

The 10 percent increase in the value of consumer borrowing also outpaced the the $8 billion increase that was forecast by economists surveyed by Dow Jones Newswires, the agency reported.

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Increased willingness to borrow is a sign of falling unemployment as households venture to buy cars and pay for education. At the same time, according to Bloomberg, increased borrowing is also a sign that consumers may not yet have the cash on hand to make the purchases they want to.

Meanwhile, the rate of savings among Americans has fallen noticeably since 2010, according to Dow Jones, as the latest government figures show that it was 5.1 percent in November 2010 and was at 3.5 percent in November of 2011. The US Federal Reserve has forecast modest growth of between 2.5 percent and 2.9 percent in 2012.