Consumer borrowing sees surprising increase
WASHINGTON — Consumer borrowing in the United States unexpectedly rose in March for the second time in three months, indicating Americans are becoming more optimistic about the recovery.
The $2 billion rise during the month followed a revised $6.2 billion decline in February that was smaller than previously reported, the Federal Reserve said yesterday. Credit was forecast to fall $3.7 billion in March, according to the median estimate in a Bloomberg News survey.
Confidence to finance spending may grow as more people are hired after the creation of 290,000 jobs in April, the most in four years. Consumer purchases, which account for about 70 percent of the economy, rose at the fastest pace in three years during the first quarter.
“Consumption has recovered in recent months, and should continue the recovery in light of an improving jobs market,’’ said Win Thin, senior currency strategist at Brown Brothers Harriman & Co. in New York.
Economists had forecast consumer credit would drop from a previously reported $11.5 billion slump a month earlier, according to the median of 33 economists in a Bloomberg survey.
The figures follow a Labor Department report yesterday that showed employment rose last month by the most since March 2006. The jobless rate unexpectedly increased to 9.9 percent as more people entered the labor force looking for work.
Nonrevolving debt, including loans for cars, rose by $5.1 billion in March, according to the Fed’s statistics. Revolving debt, such as credit cards, fell by $3.2 billion in March. Auto sales in the United States rose to an 11.8 million annual pace in March, the strongest performance since August 2009. The pace slowed to 11.21 million last month.
The strength in March was helped by Toyota Motor Corp. incentives after record recalls. Ford Motor Co. led US-based automakers with a 40 percent jump sales, followed by a 21 percent gain at General Motors Co.
Chain stores in March turned in their best year-over-year performance since 1999, industry figures showed last month. Gap Inc., Saks Inc., and TJX Cos. posted March sales gains that exceeded analysts’ estimates.
Consumers helped propel the economy in the first three months of the year, according to Commerce Department statistics released April 30. Gross domestic product grew at a 3.2 percent annual rate in the first quarter as household spending increased at a 3.6 percent pace.