Consumer Borrowing Rises at Fastest Pace in 10 Months

Americans increased their borrowing in April at the fastest pace in 10 months as credit card spending and auto loans both picked up.

The Federal Reserve reported Wednesday that consumer borrowing rose at an annual rate of 5.9% in April, a significant increase from a 0.8% gain in March.

It was unclear, however, how long the rebound in borrowing would last given a decline in consumer confidence during May that was attributed to worries about soaring prices for gasoline and other energy products.

The data on borrowing represented the biggest gain since a 6.8% jump in June of last year.

The increase in dollar terms was $10.6 billion, which pushed total consumer credit to a record $2.17 trillion. The Fed’s measurement of consumer credit does not include mortgages and other loans secured by real estate.

The small rise in March was revised down from an original estimate a month ago that borrowing had risen at a 1.4% rate. For April, consumer borrowing on credit cards and other types of revolving loans rose at an annual rate of 4.5% after having fallen 2.3% in March.

Consumer borrowing for auto loans and other types of nonrevolving credit rose at a rate of 6.7% in April after having fallen 2.6% in March.

Economists are predicting that consumer spending, which accounts for two-thirds of total economic activity, will slow as gasoline costing about $3 a gallon leaves consumers with less to spend in other areas.