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To: patron_anejo_por_favor who wrote (111791)	7/9/2001 4:57:36 PM
From: Ken98	Read Replies (4) \| Respond to of 436258

<<Consumers Tightfisted in May Consumers Tightfisted in May; Slowest Borrowing Rate in 19 Months By JEANNINE AVERSA Associated Press Writer WASHINGTON (AP) -- Consumers, worried about their jobs in the face of layoffs, were a bit tightfisted in May, borrowing money at the slowest pace in 19 months. Consumer credit rose by a seasonally adjusted $6.5 billion in May, or a 4.9 percent annual rate, the Federal Reserve reported Monday. That was a much smaller increase than the $9.5 billion rise in credit that many analysts had forecasted. The 4.9 percent growth rate was the slowest since a 4.7 percent rate of increase registered in October 1999. May's pace of borrowing was less than half the pace as in April, when total consumer credit rose at a revised 10.5 percent rate, or by $13.7 billion. The slowdown in borrowing ``reflects job insecurities and the impact of actual layoffs, which are making consumers more cautious,'' said Paul Taylor, chief economist at the National Automobile Dealers Association.>> Only in America could an INCREASE in consumer credit almost double the rate of inflation be viewed as a "retrenchment." Heaven forbid anyone actually pay down some of those loans... This combined with the reduction in business loans <<Business loans...........1081.7 dn........6.3>> reported last week might be evidence that the debt revulsion process has begun. It will be interesting to see if the June consumer numbers confirm this. Query: If credit growth is slowing along with the general economy, what reason does the Fed have to increase the monetary supply in the manner it has recently?