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

DATE: WEDNESDAY, February 8, 1995                   TAG: 9502090031
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

SHOPPERS HIT BRAKES ON CREDIT

A BORROWING SLOWDOWN is emerging faster than analysts had expected. Credit cards and auto loans lead the downward spiral.

Consumer credit rose $7.4 billion in December, the smallest increase in five months, signaling an abrupt slowdown in spending.

The Federal Reserve said Tuesday that installment debt climbed 9.8 percent at an annual rate in December, compared with 16.5 percent in November and 15.9 percent in October.

Analysts are predicting a slowdown in consumer spending and debt this year, but the sharp December drop from earlier large increases was not expected.

Consumer credit includes all household debt not secured by real estate, such as home equity loans and home mortgages. The totals are adjusted for seasonal variations.

Before the latest report, analysts said rapid increases in consumer credit reflected rising car sales and increasing use of credit cards to pay for purchases at the beginning of the Christmas shopping season.

The use of revolving credit, including credit cards, increased 9.7 percent at an annual rate in December, compared with 24.9 percent in November. The latest advance totaled $2.7 billion, compared with $6.8 billion the previous month.

Auto loans were up 6.5 percent, or $17.5 billion, compared with 17.5 percent or $4.6 billion in November.

But other installment buying rose 14.1 percent, or $2.9 billion, compared with 3.8 percent or $787 million in November. This category includes loans for mobile homes, education, boats, trailers and vacations.

Overall, outstanding consumer credit rose to $911.2 billion in December.

by CNB