Consumer borrowing broke a record stretch of declines with a small increase in January as a boost in auto loans offset continued weakness in credit card borrowing.
The small gain, the first in nearly a year, could be a signal that Americans are regaining confidence in the economy.
The Federal Reserve reported Friday that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for borrowing to decline by $4.5 billion. It was the first gain after a record 11 straight declines and it was the largest increase since July 2008.
The Federal Reserve reported Friday that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for borrowing to decline by $4.5 billion. It was the first gain after a record 11 straight declines and the largest increase since July 2008.
In percentage terms, the overall increase was an advance of 2.43 percent and followed a revised 2.23 percent drop in December.
The strength in January came from a $6.62 billion increase in borrowing for auto loans and other types of nonrevolving debt. That represented a 5.01 percent gain and followed a 3.69 percent rise in the auto loan category in December.
Credit cards and other types of revolving credit fell $1.66 billion or 2.3 percent. Even with the decline, it was a much smaller drop than the 12.9 percent plunge in December. Credit card borrowing has now fallen for a record 16 straight months although the January decline was the smallest since July.
The second straight month of increases in auto loans and the slowing of the decline in credit card borrowing could be an indication that consumers are beginning to feel more confident about boosting their spending and increasing debt.
That development is seen as critical to providing support to the overall economy, which is still struggling to recover from the worst recession since the 1930s.
The Labor Department reported earlier Friday that the unemployment rate held steady at 9.7 percent in February as employers shed 36,000 jobs, a smaller job loss than had been expected. The labor report was seen as a hopeful sign that the job market is finally starting to stabilize after a recession that saw the elimination of 8.4 million jobs.
The rise in overall credit pushed consumer borrowing to a total of $2.45 trillion, still 4.2 percent below where borrowing stood a year ago. The Fed's measure of consumer borrowing excludes home mortgages and other types of credit secured by real estate.
The 11 straight months of declines in overall borrowing through December marked the longest such stretch on records that go back to the 1940s.
While economists have for years worried about the low rate of personal savings in the United States, analysts have begun to be concerned that unless borrowing stabilized it could derail the recovery because it would crimp consumer spending. Such spending accounts for 70 percent of total economic activity.
Even consumers who would like to borrow have found it hard to get credit at banks. Many banks, hit by the worst financial crisis since the 1930s, have been pushed by regulators to tighten their lending standards.