WASHINGTON - Borrowing by U.S. consumers rose in March as use of credit cards accelerated, Federal Reserve statistics showed.
Borrowing increased by $9.1 billion for the month to $1.4 trillion after an $11.5 billion increase in February. Borrowing for the first quarter rose at an 11.2% annual rate, up from a pace of 8.1% in the fourth quarter.
The rise in debt coincides with consumer spending that grew in the first three months of the year at the fastest pace in 17 years. Borrowing, fueled by unemployment that sank to a 30-year low of 3.9% last month, has boosted the earnings of lenders such as American Express Co., Citigroup Inc. and Ford Motor Co.
"Consumers are still feeling good," said Robert Dederick, an economist at the Northern Trust Co. in Chicago, before the report. "They have jobs. Their incomes are rising, and they're borrowing money."
The March increase means consumer debt grew at an annual rate of 7.7% in March compared with gaining at a 9.8% rate during February and 7.1% for all of 1999, the Fed said.
Revolving loans, which include credit cards, increased $7.8 billion after rising $5.7 billion in February. Auto and other loans rose $1.3 billion in March after climbing $5.9 billion.
Analysts had expected borrowing to rise by $10 billion.
The rise in borrowing has been a boon to lenders.
Profit at American Express Co. rose 14% in the first quarter, which ended March 31, as a result of fees from cards and mutual funds. The company said the average cardholder charged $1,980 in the quarter, up from $1,781 a year earlier.
Ford Credit, the lending arm of the world's second-largest automaker, said its earnings for the quarter rose $53 million, or 18%, to $353 million. Citigroup, which has issued 97 million cards worldwide, reported last month that income from its global consumer unit rose 21% to a record $1.21 billion in the quarter.
Economists watch the Fed's report to help them gauge credit card use and consumer demand. The statistics don't track loans secured by real estate, omitting home equity loans, which have grown in popularity over the past decade.