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Ahead of the Bell: US consumer borrowing

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April 7, 2014 09:00 AM EST | AP

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WASHINGTON (AP) — The Federal Reserve releases a report on how much consumers borrowed in February. The report will be released at 3 p.m. EDT Monday.

BORROWING UP: The forecast is that borrowing increased slightly in February to $14 billion, according to a survey of economists by FactSet.

BORROWING EXPANDS: In January, consumer borrowing rose $13.7 billion following a $15.9 billion gain in December.

The growth in credit is being fueled by the category that includes auto and student loans, which increased $13.9 billion in January. The category that includes credit card loans fell $226 million during the month.

The big overall increase in January pushed total borrowing to a record $3.11 trillion. Gains in borrowing are seen as an encouraging sign that people are more confident and willing to take on debt to finance consumer spending, which accounts for 70 percent of economic activity.

That has been the trend over the past year, but most of the gains are coming in the category that covers auto and student loans. Credit card borrowing has been rising more slowly.

Borrowing on credit cards plunged after the 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.

Even with recent gains, credit card debt in January was still 16.2 percent below its peak above $1 trillion, reached in July 2008. Credit card debt stood at $856.2 billion in January, up just 0.9 percent from a year ago.

The measure of auto loans and student loans in January stood at $2.26 trillion, up 7.8 percent from a year ago. It has been up every month but one since May 2010.

A separate quarterly report on consumer credit done by the Federal Reserve Bank of New York shows that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009.

The Fed's borrowing report tracks credit card debt, auto loans and student loans but not mortgages or home equity loans.