ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 8, 1996 TAG: 9605080034
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Americans' consumer debt rose at a 7.3 percent annual rate in March, the smallest gain in six months, held back in large part by lagging automobile loans.
The Federal Reserve said Tuesday that consumer credit increased by $6.4 billion, about half the $12.2 billion advance in February. It was the smallest increase since installment debt grew $4.1 billion last September.
Many analysts had expected growth in consumer credit to slow, but still increase by about $10 billion in March.
The advance boosted total consumer debt to $1.054 trillion, 13 percent higher than the $933 billion in March 1995.
Consumer credit includes all household debt not secured by real estate. It represents about two-thirds of the nation's economic activity.
Many economists have become increasingly concerned about the high level of consumer debt, contending it threatens economic growth because high repayments will eventually force Americans to retrench.
Until recently, however, signs of a shopper retreat have been mixed.
For instance, after expanding at a modest 1.2 percent annual rate during the October-December quarter, consumer spending shot up at a 3.5 percent rate in the first three months of this year.
Purchases of durable goods - usually expensive items such as appliances and automobiles that often require borrowing - accelerated at a 7 percent rate.
But in March, auto loans edged up a barely perceptible 0.2 percent rate, nearly stalling after jumping at a 12.6 percent rate a month in February and 9.9 percent in January.
The advance was the tiniest since October 1992, when auto loans fell at a 6.3 percent rate. The increase left motor vehicle debt outstanding at $360 billion.
The category that includes loans for mobile homes, education, boats, trailers and vacations increased $1.5 billion to $283.2 billion. But the 6.5 percent annual rate of growth was just half the 13.5 percent gain a month earlier.
Still, consumers continued to use plastic. Revolving credit, which includes credit cards, shot up at a 14.1 annual rate on top of increases of 15.9 percent in February and 17 percent in January.
The $4.8 billion gain pushed total revolving credit to $410.9 billion.
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