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To: Lucretius who wrote (178195)	7/8/2002 7:13:19 PM
From: UnBelievable	Read Replies (1) \| Respond to of 436258

Consumers' Borrowing Rose By Sharp $9.5 Billion in May A WALL STREET JOURNAL ONLINE NEWS ROUNDUP WASHINGTON -- Consumers sharply increased their borrowing in May, surprising economists who expected a slowdown in outstanding credit growth because of lower retail sales that month. (Editorial Comment - Were those the same economists who were surprised that the market has not gone up given the significant interest rate cuts by the Fed.?) For extra credit I wonder what those economists think is going to happen to consumer spending and business bad debt expense should the Fed decide that unless it raises rates the dollar won't be worth a plug nickel? Outstanding consumer credit shot up by $9.5 billion to $1.706 trillion, the Federal Reserve said Monday. The increase was the biggest since November, and marked a 6.8% annual growth rate. The Federal Reserve revised April's increase in credit to $8.6 billion from $8.8 billion reported initially. Consumer-credit data tend to be volatile from month to month and are frequently revised. The jump in borrowing in May was larger than expected. Economists anticipated consumer credit had risen by only $6 billion in May, according to a survey by Thomson Global Markets. To be sure, economists weren't in close agreement as to how much consumers had lifted their borrowing, especially after retail sales dropped an unexpected 0.9% in May. The range in economists' estimates went from as little as a $2.5 billion increase all the way up to a $7.5 billion gain, according to Thomson. May's increase blew past even the highest estimate. Analysts have said the poor showing in retail sales partly reflected shoppers atoning for their stronger spending earlier in the year. In the first quarter of 2002, overall outstanding consumer credit grew at a 4.5% annual pace, down from 9% in the fourth quarter. Consumer spending, especially on homes and automobiles, has held up the recovery so far. The increase in May credit was led by a $7.1 billion jump in nonrevolving credit -- loans for autos, motor homes, education, boats, trailers and vacations. Nonrevolving credit rose only a revised $4.2 billion in April. Revolving credit, such as credit cards, rose $2.4 billion in May.