US Borrowing on the rise - contrary to prediction

The annual rate of consumer borrowing rose by an annual rate of 0.75% in January, following a revised 3.5% drop in the prior month.

York said that he will be looking closely at next week's government report on monthly retail sales for a better read on consumer sentiment going forward, especially following the surprise 1% jump reported in December. Economists polled by Briefing.com anticipate sales will show a 0.4% slide for January.

Last August, consumer credit contracted for the first time since January 1998. After a rebound in September, credit started contracting and the amount of consumer debt fell for the remainder of 2008.

Consumers have been skittish to spend and lenders have been skittish to lend in an environment where the economy is shedding jobs by the droves and foreclosures keep rising.

Friday, the government reported that the unemployment rate surged to its highest level in 25 years. Employers slashed 651,000 jobs in February, down from a revised loss of 655,000 jobs in January, according to the report from the Labor Department. The unemployment rate rose to 8.1% from 7.6% in January. To top of page