WASHINGTON – Consumer borrowing rose at a slower pace in February as the increase in auto and student loans was the slowest in eight months.
Borrowing increased by $15.2 billion in February, down from a gain of $17.7 billion in January, the Federal Reserve reported Friday.
Borrowing for auto loans and student loans rose by $12.2 billion, the smallest gain since last June. Borrowing for credit card debt rose by $2.95 billion, the biggest increase since November.
The overall increases pushed consumer borrowing to a new record of $4.05 trillion.
Household borrowing is watched for signs of how confident consumers are in taking on more debt to finance their spending, which accounts for 70 percent of economic activity.
Consumer spending is expected to rebound this quarter following a slowdown during the winter.
The Labor Department reported Friday that employers added a solid 196,000 jobs in March, up sharply from the February gain. Analysts saw the job gains as a good sign that borrowing and spending should post good gains in coming months.
The overall economy, as measured by the gross domestic product, slowed to a modest annual rate of 2.2 percent in the fourth quarter with economists believing growth slowed further to around 1.5 percent in the current quarter. But they are forecasting a rebound to around 2.3 percent GDP growth in the current April-June quarter.
The Fed's monthly report on consumer credit does not cover mortgages or other loans secured by real estate such as home equity loans.