Wednesday, February 20, 2008

WSJ: Consumer Borrowing Rises At Fastest Rate in 3 Months

Wall Street Journal
Wednesday January 9, 2008 Pg A2

U.S. consumer borrowing rose at an annual rate of 7.4% in November, the fastest pace in three months, the Federal Reserve said.

The 0.6% monthly increase in consumer credit outstanding, to $2.505 trillion, is a positive sign for consumer spending, which accounts for more than two-thirds of the nation's economic activity. Consumer credit increased at an annual rate of just 1% in October, or 0.08% for the month.

The Fed said revolving credit - largely credit-card financing - grew at an 11.3% rate to $937.5 billion, the fastest pace in six months.

Households' nonrevolving credit, such as car and boat loans, rose at an annualized 5.1% pace to $1.568 trillion, rebounding from October's drop in that category, the Fed said.

Separately, the National Association of Realtors said its forward-looking indicator of existing-home sales fell in November after rising for two months. The industry group's pending-home-sales index, based on signed contracts for homes, declined at a seasonally adjusted annual rate of 2.6% to 87.6.

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