NEW YORK (MainStreet) Consumer confidence could be on the upswing as people were spending more during the third quarter.
The average balances for student and auto loans at the close of the third quarter had increased 10.6% since the second quarter, according to the loan data of nearly 1 million Americans from Hearst-owned account management service Manilla.com. Meanwhile, the average total debt held by users across the nation decreased by nearly 1.2%, in line with declining mortgage rates and economic improvement.
"While the movement in debt balances from the first quarter through the third quarter does point to growing economic confidence of Manilla users, it is unclear if this momentum will be sustained through the fourth quarter in the face of current realities," said Jim Schinella, CEO of Manilla, a free and secure service which allows consumers to manage their bills and other personal accounts on desktop, tablet and mobile devices.
The national average student loan balance was $13,951.57 at the close of the third quarter, versus $12,814.54 at the close of the second quarter. The average loan payment also increased during this time period from $122.64 to $125.10, further pointing to growing consumer confidence as Americans are becoming increasingly comfortable with paying off larger portions of their loans.
Auto loan balances are also continuing to rise, showing a 21% increase since the close of 2012, with an average balance of $14,738.95 this quarter. This is a strong indicator that Americans are willing to spend more on cars this year, pointing to economic improvement, he said.
It is unclear if the momentum built during the third quarter will be sustained through the fourth quarter with the current economic situation, said Schinella.
"While analysts have predicted that consumers will likely spend less this holiday season, we predict they'll also be likely less likely to pay off significant amounts of their loans as they book trips for the holidays and purchase gifts for loved ones," he said.