Borrowing jumped in March

WASHINGTON – 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 February, the Federal Reserve said Monday.

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 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.