Consumer borrowing falls by $7.94B in November
Consumers cut back on their borrowing by a record amount in dollar terms in November, another sign of trouble for the rapidly weakening economy.
The Federal Reserve reported Thursday that borrowing on credit cards, and for such things as auto loans, dropped at an annual rate of $7.94 billion in November, the biggest decline in 65 years of record keeping. That also was much larger than the $500 million decline economists expected, and left total consumer credit outstanding at $2.57 trillion.
The drop represented a decline of 3.7 percent from October, which was the biggest fall in percentage terms since a 4.3 percent plunge in January 1998.
Analysts are worried the economy’s troubles could trigger a major retrenchment by consumers that will make the current recession, already the longest in a quarter-century, even worse. Consumer spending accounts for about two-thirds of total economic output.
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