Consumer Borrowing in U.S. Rose More Than Forecast in February

[Purveyor]

By Jeanna Smialek - Apr 5, 2013

Consumer credit in the U.S. climbed more than forecast in February as Americans took out more loans for motor vehicle purchases and education.

The $18.1 billion increase was the biggest in six months and followed a revised $12.7 billion advance in January, the Federal Reserve said today in Washington. The median forecast in a Bloomberg survey called for a $15 billion gain. Non-revolving debt, which includes financing for autos and college tuition, surged by $17.6 billion, the most since at least 2006.

Higher stock prices this year and increasing home values have helped households mend their balance sheets, making them more amenable to borrowing. At the same time, another report today showed the share of younger Americans in the labor force is declining amid limited job opportunities, which may explain the sustained increases in loans for secondary education.

“The drop in the participation rate has been centered in younger workers, many of whom have given up hope of finding a decent job and are instead continuing in school and racking up enormous amounts of student debt,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in an e-mail to clients. That “has contributed to the recent surge in consumer credit outstanding.”

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http://www.bloomberg.com/news/2013-04-05/consumer-borrowing-in-u-s-rose-more-than-forecast-in-february.html?alcmpid=breakingnews

[dkf]

1. I'm hoping those are more car loans and less college loans.

Boy I feel so bad for our young people.