WASHINGTON (AP) -- Americans swiped their credit cards more often in March and took out more loans to attend school. That drove the biggest one-month increase in U.S. consumer borrowing in a decade.
Consumer debt rose by $21.4 billion in March from Feb ruary, the Federal Reserve said Mon day. It was the seventh straight monthly increase and the largest since November 2001.
A measure of auto and student loans increased by $16.2 billion. A separate gauge of mostly credit card debt rose $5.2 billion after declining in January and February.
Total borrowing rose to a seasonally adjusted $2.54 trillion. That’s slightly below the all-time high of $2.58 trillion reached in July 2008, eight months after the Great Recession began.
After hitting that peak, consumers cut back sharply on borrowing for two straight years. They slowly began taking on more debt again in the fall of 2010 and in recent months have stepped up their rate of borrowing.
More borrowing is generally viewed as a healthy sign for the economy. It suggests consumers are gaining confidence and growing more comfortable taking on debt.
Analysts said a key factor driving the recent jump in borrowing is stronger hiring since fall.
But another reason more for the increase is more people are going back to school. Student loan debt jumped in March.
Paul Edelstein, director of financial economics at IHS Global Insight, said that could reflect an effort to take out loans in advance of a scheduled jump in rates this July.
Cooper Howes, an economist at Barclays Capital, said it could also mean that some people are having trouble finding jobs and are opting to go back to school.
"We expect that student loan growth will continue to push the level of consumer credit higher and we look for (credit card debt) to expand as banks become more willing to lend," Howes said.
The overall economy grew at an annual rate of 2.2 percent in the January-March quarter, helped by the strongest growth in consumer spending since late 2010. Consumer spending accounts for 70 percent of economic activity.
Still, job growth has slowed sharply in the past two months, while wages have lagged inflation. That has raised concerns that consumers might pull back on spending later this year.
Employers added just 115,000 jobs in April, the government said Friday. That followed the creation of 154,000 jobs in March.
From Decem ber through February, the economy added an average of 252,000 jobs per month.