U.S. consumer borrowing rose for a fifth straight month in February on an increase in non-revolving credit as education loans expanded, the Federal Reserve reported today.
Credit climbed $7.62 billion, the most since June 2008, to $2.42 trillion after increasing a revised $4.45 billion in January, the Fed said in Washington. The February figure exceeded the median economist forecast of a $4.7 billion increase in the measure of credit card debt and non-revolving loans, according to a Bloomberg News survey.
The second consecutive drop in revolving credit, which includes credit cards, indicates Americans remain reluctant to take on more debt even as the economy and job market improve. In addition, rising fuel and food prices are limiting people’s buying power, raising the risk that consumer spending, which accounts for about 70 percent of the economy, will cool.
The increase in loans for education shows that “people are going back to school to improve their skills,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. “We expect consumer spending to continue growing. The recovery has the strength to continue.”
The total increase reflected an $8.2 billion non-seasonally adjusted rise, to $349 billion, in the federal government category of borrowing, which includes school loans.
Estimates from 33 economists in the Bloomberg survey ranged from a $2 billion decrease to an $8 billion gain. The revised January reading was lower than the initial figure of $5 billion.
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