U.S. Consumer Debt Rose $9.1 Billion in March to $1.4 Trillion
Fri, 05 May 2000, 6:53pm EDT
By Vincent Del Giudice
Washington, May 5 (Bloomberg) -- Borrowing by U.S. consumers
rose in March as use of credit cards accelerated, Federal Reserve
statistics showed.
Borrowing increased by $9.1 billion for the month to $1.4
trillion after an $11.5 billion increase in February. Borrowing
for the first quarter rose at an 11.2 percent annual rate, up from
a pace of 8.1 percent in the fourth quarter.
RISE MORE THAN TWICE GDP growth
The rise in debt coincides with consumer spending that grew
in the first three months of the year at the fastest pace in 17
years. Borrowing, fueled by unemployment that sank to a 30-year
low of 3.9 percent last month, has boosted the earnings of lenders
such as American Express Co., Citigroup Inc. and Ford Motor Co.
``Consumers are still feeling good,'' said Robert
Dederick, an economist at the Northern Trust Co. in Chicago,
before the report. ``They have jobs. Their incomes are rising. And
they're borrowing money.''
The March increase means consumer debt grew at an annual rate
of 7.7 percent in March compared with gaining at a 9.8 percent
rate during February and 7.1 percent for all of 1999, the Fed
said.
Revolving loans, which include credit cards,
increased $7.8 billion after rising $5.7 billion in February. Auto
and other loans rose $1.3 billion in March after climbing
$5.9 billion.
Analysts had expected borrowing to rise by $10 billion.
Lenders Profit
The rise in borrowing has been a boon to lenders.
Profit at American Express Co. rose 14 percent in the first
quarter, which ended March 31, as a result of fees from cards and
mutual funds. The company said the average cardholder charged
$1,980 in the quarter, up from $1,781 a year earlier.
Ford Credit, the lending arm of the world's second-largest
automaker, said its earnings for the quarter rose $53 million, or
18 percent, to $353 million. Citigroup, which has issued 97
million cards worldwide, reported last month that income from its
global consumer unit rose 21 percent to a record $1.21 billion in
the quarter.
Economists watch the Fed's report to help them gauge credit
card use and consumer demand. The statistics don't track loans
secured by real estate, omitting home equity loans, which have
grown in popularity over the past decade. |
