Borrowings by Americans rose for the first time in a year in January, the Federal Reserve said Friday in a sign that the US economic recovery is on track.
The central bank said that consumer credit rose 2.4 percent or 5.0 billion dollars from December to a total of 2.456 trillion dollars in the first month of the year.
The increase on the back of auto loans was the first since January 2009 and the biggest since July 2008.
Most analysts had expected consumer credit to drop by 4.5 billion dollars in January after a 4.6-billion-dollar decline in December.
Despite the rise, analysts remain cautious.
"It is still too early to say consumer demand has stabilized from one month of positive growth in consumer credit, but it is very encouraging to see consumers willing to take on more debt," analysts at Briefing.com said in a client note.
One factor that could have bloated credit activity was the increase in interest rate levels imposed by auto financing companies, they said.
"The increase in credit may not be due to more expenditures but from car loans becoming more expensive," the Briefing.com analysts said.
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