Americans are slowly but steadily borrowing more money, bringing to an end a five-year effort to cut household debt that has slowed consumer spending and the economy.

Total household debt increased $78 billion in the July-September quarter to $11.7 trillion, the Federal Reserve Bank of New York said this week. The increase was led by rising mortgage and auto loans. That is the fourth increase in household debt in the past five quarters.

Total debt is still below the peak of nearly $12.7 trillion reached in the third quarter of 2008. But it has risen 5 percent since bottoming out in the second quarter of last year.

The sustained increase is a sign that Americans are more confident and may be ready to spend more, trends that could fuel faster economic growth. Consumer spending has remained sluggish since the Great Recession ended in June 2009, held back by weak wage increases and by American households' focus on repairing their finances.

As the recession intensified in 2008, consumers started paying off bloated debt levels, particularly credit card and mortgage debt, in a process economists refer to as "deleveraging." Some of the decline in household debt occurred because consumers defaulted on debt, though the New York Fed said less borrowing and paying off debts played a greater role. -- AP

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