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The improved economic outlook has emboldened some people to borrow more. In the final three months of last year, household debt rose at an annual rate of 0.25 percent. It was the first increase since mid-2008. "Consumers have been more willing to use credit cards for shopping, signaling renewed confidence in their financial and job prospects," said Paul Edelstein, director of financial economics at IHS Global Insight. That doesn't mean Americans are starting to significantly load up their credit cards again, financial planners and economic analysts say. Credit card debt remains well below its pre-recession level as measured by a separate report released by the Fed this week. An Associated Press survey of economists last month found that they expect Americans to save gradually less and borrow more, reversing a shift toward frugality that followed the financial crisis and start of the Great Recession. Roughly half of U.S. households own stocks or stock mutual funds. Stock portfolios make up about 15 percent of Americans' wealth. That's less than housing but ahead of bank deposits, according to the Fed's report. Most stock wealth is owned by the richest Americans, who also account for a disproportionate amount of consumer spending. Eighty percent of stocks belong to the richest 10 percent of Americans. And the richest 20 percent represent about 40 percent of consumer spending. In three years, stocks have nearly doubled. Thanks largely to that surge, about 95 percent of people with 401(k) retirement savings plans have more money in their accounts than at the peak of the stock market in October 2007, according to the Employee Benefit Research Institute in Washington. That's largely because of workers' continued contributions to their retirement accounts. The average 401(k) balance in accounts at Fidelity Investments, the nation's largest 401(k) administrator, rose 8 percent in the fourth quarter. And stock gains this year have likely increased those accounts further. That doesn't mean people are feeling carefree about their financial situations. "Many people are surprised their net worth has increased," said Tom McGuigan, a certified financial planner at Oklahoma City-based Burns Advisory Group. "And some aren't even sure it's real yet."
[Associated
Press;
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