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                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 8, 1992                   TAG: 9202080244
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

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CONSUMERS SCUTTLING DEBT

Consumer are unloading mountains of debt faster than they are taking on new loans, the government said Friday.

A gauge of consumer credit plunged at an annual rate of 2.8 percent in December, contributing to the first annual decline in installment debt in 33 years, the Federal Reserve reported.

The central bank said consumer credit fell a seasonally adjusted $1.7 billion to $728.4 billion as the year ended. That was down 1 percent from 1990 and the first drop since a 0.5 percent decline in 1958.

The report also showed the pace of borrowing was even slower in October and November than believed. It revised an October rise from 2.7 percent to 1.9 percent and said November credit was off 0.3 percent rather than unchanged.

All major types of installment credit except for mobile homes posted declines in December, including automobile loans, which have fallen every month this year.

Even revolving credit, which includes credit cards, was off despite the holiday shopping season. Many retailers had said sales in December were a disappointment.

Consumer credit includes all loans except mortgages and home equity loans. It helps finance much of overall consumer spending, which represents two-thirds of the nation's economic activity.

Except for the 1957-58 recession, consumer credit continued to rise during post-World War II downturns. Government and private economists have said high consumer and business debt contributed to the current recession.

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