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

DATE: THURSDAY, June 8, 1995                   TAG: 9506090045
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Bloomberg Business News
DATELINE: WASHINGTON                                  LENGTH: Medium

CREDIT CARDS HUSTLING

Installment borrowing rose $11.04 billion for the month, the 29th consecutive increase, the Federal Reserve reported Wednesday.

While the increase was less than the revised $14.14 billion gain in March, it still exceeded analysts' expectations. They were looking for a $9.7 billion gain in April.

``The pace of credit growth is rivaling that of the mid-1980s,'' Smith Barney Inc. analysts said in a research report. And that ``could be a sign of distress, because people are paying off debt more slowly'' as household finances weaken, said Raymond Stone, a managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.

Federal Reserve Chairman Alan Greenspan said Wednesday in Seattle that the U.S. economy is experiencing a ``pronounced'' slowdown, which he said is ``desirable'' because it will keep inflation in check.

``The probability of a recession has edged up as one would expect'' following the slowing of consumer demand and a buildup in inventories that started last year, Greenspan said.

However, he said, ``The probability of a significant ... recession in the intermediate future has decreased very significantly,'' because recent government reports show that unsold goods aren't piling up at an alarming rate.

Greenspan didn't directly address the issue of whether the Fed will cut interest rates to prevent the economy from going into a recession.

Analysts pay particular attention to the Fed's credit statistics because consumer spending accounts for two-thirds of U.S. economic activity. However, the number tends to be erratic on a month-to-month basis and should be viewed carefully.