Borrowing of U.S. consumers were up although only slightly in February, but this shows that the steady creation of jobs is definitely underpinning household finances.
One yardstick of non-real-estate debt, outstanding consumer credit, increased by a seasonally adjusted $17.22 billion in February, compared to the previous month, according to the Federal Reserve.
Overall, consumer credit has grown each month in the past four and a half years. It has expanded at a seasonally adjusted annual rate in February at 5.82 percent.
The Wall Street Journal surveyed several economists who said they expected a $14.8 billion increase in consumer borrowing in February. It climbed to 5.06 percent in January, which was upgraded from a previous prediction of 3.6 percent.
Another type of consumer borrowing, revolving credit outstanding which is mostly credit cards rose at an annual pace of 3.74 percent in February compared with a contraction of 0.31 percent in January. Revolving credit has increased in 11 of the past 12 months.
Non-revolving credit outstanding such as auto and student loans increased at an annual rate of 6.57 percent compared with its 6.99 percent growth rate in January.
Consumer behavior is being closely watched by economists since their spending affects economic growth in 2016. U.S. exports were adversely affected by the weak economies abroad which widened the trade deficit.
Investments in new businesses have been sluggish and the manufacturing sector has struggled due to the strengthening of the dollar, making goods made in the U.S. more expensive abroad.
In the first quarter of 2016, consumers were slightly reluctant to increase their spending, prompting many economists to downgrade their expectations for growth during that period, to only 1 percent annual growth rate or even below that.
That rate would not be far from the growth rate exhibited by the economy in the last quarter of 2015 which is only 1.4 percent.