American consumers' borrowing up $16.5B in February
WASHINGTON — Consumers increased their borrowing in February on autos and student loans by the largest amount in a year. But for a second consecutive month, they cut back on their credit card use.
Consumer borrowing climbed $16.5 billion in February, up from a $13.5 billion gain in January, the Federal Reserve reported on Monday.
The category that includes credit cards fell $2.4 billion after a $241 million drop in January. But this decline was offset by an $18.9 billion increase in borrowing in the category that covers autos and student loans, the biggest one-month gain since February 2013.
The overall increase in consumer debt pushed total borrowing to a record $3.13 trillion.
Gains in borrowing are viewed as an encouraging sign that people are more confident and willing to take on debt.
Increased household borrowing can fuel higher consumer spending, which accounts for 70 percent of economic activity.
The February decline in credit card borrowing marked the third decrease in the past four months. That continues a trend evident since the 2007-2009 Great Recession.
Borrowing on credit cards plunged during that recession as consumers tried to lower their debt during a period when millions of people were losing their jobs, and many people still working were worried about the threat of layoffs.
Credit card borrowing started rising again in 2011, but the increases have lagged far behind the category that covers auto and student loans. Economists said that many households have become more cautious about taking on high-interest debt.
Credit card debt in February was still 17.3 percent below its peak above $1 trillion reached in July 2008. Credit card debt stood at $854.2 billion in February, up just 0.5 percent from a year ago.
The measure of auto loans and student loans in January stood at $2.28 trillion, up 7.7 percent from a year ago. It has been up every month but one since May 2010.
A separate quarterly report on consumer credit done by the Federal Reserve Bank of New York shows that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009.
The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages or home equity loans.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Amusement parks fight off home entertainment threat
- BNY Mellon trader fired in conduct probe
- Caution creeps into economic picture as consumer, business spending taper
- State officials prompt UPMC, Highmark to go to mediation to resolve Medicare dispute
- S&P 500 logs 47th record high close for year
- Lower gasoline prices fail to spur consumer spending
- Westinghouse to construct colossal nuke plant in Turkey
- Retailers that won’t open on Thanksgiving hope move pays off
- Small businesses’ dilemma: Keep costly health care coverage or lose talented workers
- Federal agency checking whether Highmark has enough doctors in Medicare plan
- Health care, gas drilling industries await Gov.-elect Wolf’s footprint