Borrowing amongst consumers increased in March as more Americans took out loans for schooling and automobiles, according to the Federal Reserve. The rise over the past month is the highest amount of borrowing the country has seen in more than a year.
Consumers in March borrowed $17.5 billion in credit. This comes after a revised figure of $13 billion in February, which was lower than the original projection. The numbers for March represent the largest amount of borrowing consumers have done since February 2013 and exceeded the median projection of $15.5 billion, according to a survey conducted by Bloomberg.
The rise in borrowing is in part due to consumers' confidence with current economic conditions. Job growth and rises in the stock market are a few reasons why Americans feel more comfortable with taking out loans, according to Bloomberg Businessweek. Paul Edelstein, director of financial economics at HIS Global Insight Inc., said most of the borrowing is being done by responsible consumers.
"The worst of the deleveraging is behind us but the future is less certain," Edelstein said. "All the debt is really for student lending and autos but not for credit cards."
Much of the increase for borrowing was for automobile and student loans. According to Ward's Automotive Group, auto sales rose to an annualized pace of 16.33 million in March, the fastest rate of month-over-month growth since May 2007.
Federal student loans increased to $2.6 billion in March, which contributed to student debt rising to $32.6 billion for the first three months of 2014.
According to a survey conducted by the Fed, banks and lenders are a little more lenient in issuing new lines of credit and loans because they see car purchases and student loans as responsible investments.