U.S. state- and local-government debt rose during the second quarter for the first time since 2010, the Federal Reserve Board reported Thursday, as borrowing costs held near a half-century low.

The debt grew at an annual rate of 0.8 percent from April through June, according to data released by the Federal Reserve today. The increase follows five straight quarters of declines as states and cities paid down debts.

Borrowing costs in the $3.7 trillion municipal securities market are close to their lowest since the late 1960s as the central bank holds down interest rates in a bid to stoke the economy.