http://news.yahoo.com/s/ap/20080407/ap_on_bi_go_ec_fi/consumer_credit
Growth in consumer borrowing slows
By MARTIN CRUTSINGER, AP Economics Writer
1 hour, 7 minutes ago
WA****NGTON - Consumers, battered by a credit crunch and prolonged
housing slump, significantly slowed their pace of borrowing in
February.
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The Federal Reserve re****ted Monday that consumer borrowing rose at an
annual rate of 2.4 percent in February, just half of the 4.9 percent
increase in January.
The slowdown reflected much weaker demand for auto loans and other
type of non-revolving credit, which rose at a rate of 0.4 percent in
February, much lower than the 3.6 percent growth rate in January.
Credit card debt rose at a 5.9 percent rate.
Consumers have been moving to put more of their purchases on their
credit cards as banks have tightened up on lending standards for home
equity loans in response to the deepening credit crisis. The price of
homes has fallen sharply in many parts of the country.
The 2.4 percent overall rate of increase was the slowest since debt
growth had slowed to a 1 percent rate in December.
The overall increase in credit of $5.16 billion, which was slightly
below expectations, pushed total consumer credit to a record $2.539
trillion.
The Fed's measure of consumer borrowing does not include any debt
secured by real estate such as mortgages or home equity loans.
The economy has slowed dramatically in recent months under the impact
of a slump in housing, a severe credit crisis that hit in August and
rising unemployment. The government re****ted Friday that unemployment
jumped to 5.1 percent in March as businesses slashed another 80,000
jobs.
While many economists believe the country has slipped into a
recession, the Bush administration says that growth should revive
starting this summer when 130 million households start spending their
economic stimulus checks.
Meeting Monday at the White House with owners of small and medium-
sized businesses, President Bush said the economy was going through a
"rough time" but he was confident things would turn around. He urged
lawmakers contemplating passage of a second economic stimulus measure
to allow more time for the first $168 billion package to work.
"Give this one a chance to work," Bush said during the meeting with
business executives including those in the orchard, meat packing and
large equipment industries.
He said experts were telling him that the stimulus package would boost
overall economic growth by between 1 percent to 1.5 percent later this
year.
___
Associated Press writer Deb Riechmann contributed to this re****t.
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