UPDATE 1-U.S. consumer borrowing robust in Feb
WASHINGTON, April 7 (Reuters) - U.S. consumers kept pushing up their purchases on credit at a booming pace in February, the Federal Reserve said on Friday, adding spending punch to the economy's expansion.
Total consumer instalment credit rose a seasonally adjusted $12 billion, at a 10.2 percent annual rate, following an upwardly revised $18.2 billion increase at a 15.7 percent annual rate in January.
The surge in January consumer credit set a record. The Fed had said previously that buying on credit had risen $17 billion in January, but it revised that up.
The figures underline the powerful stimulus to growth that the economy is receiving from consumer spending, which accounts for two-thirds of national economic activity. With the economy having completed nine full years of unbroken expansion since the last recession in 1990-91 and with plenty of jobs, consumers have been on a spending spree for new cars and other goods.
The Federal Reserve has raised short-term interest rates five times since last June, trying to restrain the economic growth rate and keep a lid on potential inflationary wage and price rises. So far, however, there is scant evidence of a significant slowdown.
During February, revolving or credit-card debt rose $5.7 billion at an 11.4 percent annual rate. That was down from a $9.2 billion advance at an 18.5 percent rate in January, but still represented a hearty pace of credit-card use.
Nonrevolving credit, a category that includes new-car loans and other lending for purposes like buying a boat or for education or vacations, grew $6.2 billion at a 9.2 percent rate in February. That was lower than January's $9 billion increase at a 13.6 percent rate.
The Fed monitors monthly consumer credit as one gauge of spending, but it has limits. It does not measure home equity loans, for example, which Fed chairman Alan Greenspan has cited as a source for increased borrowing and spending as home values have risen so strongly during the long-running expansion.
18:51 04-07-00 |
