Consumer borrowing growth weak
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WASHINGTON — Consumers, battered by a credit crunch and prolonged housing slump, significantly slowed their pace of borrowing in February.
The Federal Reserve reported Monday that consumer borrowing rose at an annual rate of 2.4% in February, just half the 4.9% increase in January.
The slowdown reflected much weaker demand for auto loans and other types of nonrevolving credit, which rose at a rate of 0.4% in February, much lower than the 3.6% pace in January. Credit card debt rose at a 5.9% rate.
Consumers have been putting more of their purchases on credit cards as banks have tightened up 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 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 debt secured by real estate such as mortgages or home equity loans.
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