Consumers remain in the mood to borrow
WASHINGTON – Consumer borrowing in the United States rose $ 25.8 billion in March, the second consecutive month of strong gains and another indication that the economic recovery is gaining momentum.
The March gain announced by the Federal Reserve on Friday follows an even larger $ 26.1 billion increase in consumer borrowing in February. The two monthly increases were the biggest gains since an increase of $ 26.8 billion in December 2019, before the pandemic hit.
The March loan advance reflects a $ 6.4 billion increase in the category that includes credit cards and a $ 19.4 billion increase in the category that covers auto loans and student loans.
Consumer borrowing is monitored closely for signals it can send about households’ willingness to borrow to finance their spending. Consumer spending accounts for two-thirds of US economic activity.
The February and March increases in the credit card category follow four consecutive months in which credit card borrowing was down. Even with recent gains, total credit card category debt of $ 980 billion is down 9% from March 2020 level.
The Fed’s total monthly debt stood at a record $ 4.24 trillion in March.
The Fed’s monthly report does not cover mortgages or any other debt secured by real estate such as home equity loans.