WASHINGTON (AP) — Consumers boosted their borrowing in December by the largest amount in 10 months as demand for auto, student and credit card loans showed big gains.
Consumer borrowing rose $18.8 billion in December, the biggest increase since February, the Federal Reserve reported Friday. The category that includes auto and student loans increased the most, rising $13.8 billion. Credit card debt, which has been lagging, rose by $5 billion. That was the largest jump since May.
The big increase pushed total borrowing to a fresh record of $3.1 trillion. Gains in borrowing are viewed as an encouraging sign that consumers are more confident and willing to take on more debt to finance consumer spending, which accounts for 70 percent of economic activity.
Consumers had increased borrowing by $12.4 billion in November.
Over the past year, consumers have become more confident and have been willing to take on debt. Most of those gains have come in the category that covers auto and student loans. Credit card borrowing has been rising more slowly.
Borrowing on credit cards plunged after the Great Recession as financial institutions tightened lending standards and households became more cautious about taking on high-interest debt at a time when millions of people were losing their jobs.