WASHINGTON – Consumers increased their borrowing to a record high in February, driven by a large jump in auto and student loans.
The Federal Reserve reported Tuesday that consumer borrowing expanded $15.5 billion in February following a $10.8 billion gain in January. The February increase pushed borrowing to a fresh record of $3.34 trillion.
Borrowing in the category that covers auto loans and student loans increased by $19.2 billion, the biggest monthly gain since July 2011. That offset a $3.7 billion decline in the credit card category.
Economists expect credit card use to rebound in coming months, which would bolster consumer spending this year.
Consumer borrowing has risen 6.8 per cent over the past year, fueled by an 8.3 per cent rise in auto and student loans. The credit card category is up a more modest 3.4 per cent. Credit card debt has grown much more slowly since the Great Recession, when millions of jobs were lost and laid-off workers struggled to find new employment.
But economists are hopeful that with healthy job growth and unemployment down to 5.5 per cent, households will feel more confident about using their credit cards.
The Fed’s monthly credit report does not cover mortgages or other loans backed by real estate such as home equity loans.