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Consumers borrow less freely in February
2007-04-07
Consumers increased their borrowing in February at the slowest pace in four months. The Federal Reserve reported Friday that consumer borrowing rose at an annual rate of just 1.5 percent in February. That was down from a 3.3 percent growth rate in January and marked the smallest increase since October. The moderation in February was led by consumers borrowing less freely to finance cars, vacations, education and other so-called nonrevolving credit. Demand for such credit edged up at only a 0.4 percent pace. That was down sharply from a 4.2 percent growth rate in January. Consumers didn't lay off on their credit cards, however. Use of revolving credit, primarily credit cards, rose at a brisk pace of 3.4 percent in February. That was a big pickup from a 1.7 percent growth rate logged in January. Still, the slower overall growth in consumer borrowing comes as gasoline prices are rising, the housing market is still stuck in a slump and the stock market has experienced some turbulence. Consumers are a major shaper of overall economic activity, and thus analysts monitor various barometers closely for clues about their willingness to spend. So far, consumers have been spending sufficiently to keep the economy moving ahead despite the painful housing slump. Economists attribute consumers' resiliency to the fact that the jobs market is staying healthy and that workers' paychecks are growing. The increased borrowing pushed total consumer debt up by $2.97 billion to a record of $2.41 trillion in February. The Fed's measure of consumer borrowing does not include mortgages or other loans secured by real estate. ___ On the Net: Federal Reserve: http://www.federalreserve.gov
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