AP Economics Writer

WASHINGTON (AP) — Consumer borrowing rose at a slower pace in February as the increase in auto and student loans was the slowest in eight months.

Borrowing increased by $15.2 billion in February, down from a gain of $17.7 billion in January, the Federal Reserve reported Friday.

Borrowing for auto loans and student loans rose by $12.2 billion, the smallest gain since last June. Borrowing for credit card debt rose by $2.95 billion, the biggest increase since November.

The overall increases pushed consumer borrowing to a new record of $4.05 trillion.

Household borrowing is watched for signs of how confident consumers are in taking on more debt to finance their spending, which accounts for 70% of economic activity.

Consumer spending is expected to rebound this quarter following a slowdown during the winter.

The Labor Department reported Friday that employers added a solid 196,000 jobs in March, up sharply from the February gain. Analysts saw the job gains as a good sign that borrowing and spending should post good gains in coming months.

The overall economy, as measured by the gross domestic product, slowed to a modest annual rate of 2.2% in the fourth quarter with economists believing growth slowed further to around 1.5% in the current quarter. But they are forecasting a rebound to around 2.3% GDP growth in the current April-June quarter.

The Fed’s monthly report on consumer credit does not cover mortgages or other loans secured by real estate such as home equity loans.

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