U.S. Credit Use Slowed in September
WASHINGTON (AP) _ Americans slowed their borrowing in September as they cut back on the use of credit cards and auto loans amid a slowing economy.
The Federal Reserve said Tuesday that consumer credit increased by a seasonally adjusted $6.5 billion in September, or 5.2 percent at an annual rate, the slowest pace since October 1999.
Consumer credit in August grew by $12.3 billion, or at a 10.1 percent rate, according to revised figures. That was less than the $13.4 billion the central bank previously estimated.
In September, demand for revolving credit, such as that carried month to month on credit cards, rose by $3.6 billion _ a 6.8 percent annual rate _ down sharply from $6.7 billion and a 12.6 percent rate in August.
Total nonrevolving credit, such as loans for new cars, vacations and other big-ticket items, inched up by $2.8 billion at an annual rate of 4.0 percent. That was down from $5.6 billion and an 8.1 percent rate in August.
The Fed has raised interest rates six times since June 1999 to slow the economy and its main engine, consumer spending. Consumers account for two-thirds of all economic activity.
The central bank’s rate increases are designed to raise borrowing costs and thus cool demand for such big purchases as cars and homes.
Last month the Fed, citing evidence of moderating economic growth, opted not to boost rates again. But it held the door open to additional increases in the future should inflation risks intensify.
The Fed’s report on consumer credit includes credit card debt and loans for autos, boats and mobile homes. It does not include loans backed by real estate, such as home mortgages or increasingly popular home equity loans.
On the Net: Federal Reserve site: http://www.federalreserve.gov