Federal Reserve Bank of Cleveland President Loretta Mester said improving consumer finances and the record wealth of American households are helping to support economic growth and push inflation back up to the central bank’s target.

Household debt relative to disposable personal income has fallen to around 100 percent and is near its longer-run trend, even amid a rise in consumer credit excluding mortgages, Mester said Friday in the text of a speech in Philadelphia.

“The improvement in households’ balance sheets is one of the important fundamentals underlying the outlook for continued expansion, further improvement in labor markets, and inflation gradually moving back to the Federal Reserve’s 2 percent target over the medium term,” said Mester, who doesn’t vote on policy this year.

Mester cited the rebound in household net worth, which rose to $82.9 trillion at the end of 2014, according to the Fed’s flow of funds report. That’s up from the pre-crisis peak of $67.9 trillion in 2007, the central bank’s data show.

“Household debt is now rising again as charge-offs have been shrinking, mortgage issuance has turned positive, and consumer credit excluding mortgages has been rising,” Mester said. “Despite this rise in credit, households’ leverage ratios are down.”

Mester, 56, spoke at a conference on regulating consumer credit at the Philadelphia Fed, where she served as research director before being appointed to lead the Cleveland reserve bank in June.