WASHINGTON — Consumers, despite worries about possible war with Iraq, increased their borrowing in January by the largest amount in 14 months.
The Federal Reserve reported Friday that consumer credit shot up in January from the previous month by a seasonally adjusted $13.2 billion, or at a brisk annual rate of 9.1 percent. That was the biggest increase since November 2001.
The increase pushed total consumer debt up to $1.74 trillion.
January's rise marked a big leap from December, when consumer borrowing rose at a rate of just 1.4 percent, or nearly $2 billion.
Economists said the jump in borrowing was particularly surprising given war worries, rising energy prices and the turbulent stock market. Analysts believed the sharp rise reflected consumers' desire to take advantage of some good postholiday deals.
The advance in January was led by demand for nonrevolving credit, which includes loans for new cars and vacations. Nonrevolving credit jumped at a rate of 10.2 percent, or $8.6 billion, in January. That compared with a 7 percent growth rate and a $5.8 billion increase in December.
"Consumers couldn't resist bargains, particularly autos, and decided to get in while the getting was good," said Richard Yamarone, economist with Argus Research Corp.
"No doubt heavily discounted, postholiday merchandise, combined with widespread discounts and incentives from automakers, contributed to much of this unexpected gain."
Demand for revolving debt, such as credit cards, went up by $4.5 billion, or at a 7.6 percent annual rate in January. That marked an about-face from December, when consumers cut back on their use of revolving credit by $3.9 billion, representing a 6.5 percent rate of decline.
The Fed's report on consumers includes credit card debt and loans for cars, boats and mobile homes. It does not include real estate loans such as home mortgages or increasingly popular home equity loans.
On Thursday, the nation's retailers reported disappointing sales for February as war worries and winter snowstorms gave consumers reasons not to shop. Against this backdrop, economists expected consumer borrowing to slow in February, reflecting a more cautious consumer.