Consumers paid off more debt than they took out for the third month in a row in February, the Federal Reserve Board said Friday in a report reflecting concerns about the recession and gulf war.

Consumer installment credit shrank by $2.30 billion in February, a larger contraction than the $2.26 billion drop in January and the $342 million decline in December.The figures show credit growth was falling at a 3.7 percent annual rate in January and February, much faster than the 0.6 percent rate of decline recorded in December.

Such a sharp contraction in credit use has a major impact on the economy because consumer spending on goods and services fuels two-thirds of the nation's business activity.

The last time credit shrank for three straight months was four years ago.

"It's a remarkable pullback," said Jean Sundrla, an economist with Evans Economics Inc. "But it should moderate come March and April and hopefully point to a May-June recovery, at least for car sales."

The end of the gulf war gave consumer confidence a huge boost, according to surveys, but the unemployment rate continues to climb and car sales so far have been anemic.

The jobless rate increased to 6.8 percent in March from 6.5 percent in February, the Labor Department reported Friday.

The credit cutback was centered on cars, as loans to buy new autos fell by $3.09 billion in February after falling $1.74 billion in January. Other loans, including consumer bank loans but not home mortgages, were down $339 million after a $2.61 billion January decrease.

Mobile-home loans fell $238 million in February after growing by $868 million in January.

The only major category of credit that increased was revolving, or credit-card debt, which swelled by $1.38 billion after a $1.23 billion expansion in January.

The tight rein on spending, together with soaring unemployment, suggests it may take longer for the economy to emerge from the recession it slipped into late in 1990.