Posted on 01/09/2006 2:32:02 PM PST by Toddsterpatriot
WASHINGTON - Consumer borrowing fell in November for a second straight month, the first time that has occurred in more than 13 years.
The Federal Reserve reported Monday that borrowing declined at an annual rate of $648.8 million in November following a record rate of decline of $8.4 billion in October.
The weakness in November caught analysts by surprise. They had been expecting a rebound in borrowing based on the fact that consumer spending and consumer confidence both revived in November, reflecting a drop in gasoline prices.
The $8.4 billion rate of decline in borrowing in October was a record for a single month and reflected a sharp drop in auto sales, which had soared during the summer as automakers offered attractive sales incentives.
Expressed in percentage terms, consumer credit edged down at an annual rate of 0.4 percent in November after having fallen at a 4.7 percent rate in October.
Analysts said the slowdown in borrowing reflected the weaker auto sales and also a greater reliance by consumers on home equity loans, which are not measured in the Fed statistics.
"People are still using the equity in their homes to finance spending," said Mark Zandi, chief economist at Moody's Economy.com. "It is much cheaper to borrow against your home than to use your credit cards."
On Wall Street, the Dow Jones industrial average closed above 11,000 for the first time since before the Sept. 11, 2001, terrorist attacks as investors enjoyed a five-day rally that has sent stocks soaring in the New Year. The Dow rose 52.59 points Monday to close at 11,011.90.
Consumer credit posted sizable gains in July and August above 6 percent, reflecting the surge in auto sales. In September, consumer credit had risen at an annual rate of 2.8 percent.
By category, credit card debt and other revolving loans edged up a slight 0.5 percent in November at an annual rate after having fallen by 2.8 percent in October.
Non-revolving debt, the category that includes auto loans, fell for a third consecutive month, dropping 0.9 percent after having declined 5.8 percent in October and 0.3 percent in September.
The decline in overall borrowing pushed consumer debt in the categories tracked by the Fed down to $2.156 trillion in November, slightly below the all-time high of $2.165 trillion set in September.
I had a similar experience. I got off easy, I was able to free myself from the hostage suituation by buying an Ipod Nano. Listening to the Rush podcasts is helping me recover from the trauma.
Well, I'd say that ffrom a consumer side, that's a good thing. Of course, the lenders would see it as bad, but now they have to work harder by lowering their rates or making them more attractive in some other fashion. That also benefits consumers. And don't we keep seeing "doom and gloom" articles in the press how consumer debt is a crisis in America?
At loan-shark rates, sure there is plenty of credit to go around. The amount of money they can make per sucker gives every incentive to saturate US mail with the mailings. It's not the credit that is lacking but the ability to borrow. Many will only leverage themselves so far even if credit is available.
People aren't "VICTIMS" of anyone, but themselves.
And why have YOU come up with yet another FALSE victim category? Perhaps you are on the wrong forum, since your postings are anything but Conservative.
LOL !
Do it for the children.
You got that right. Nobody is going to give you that third mortgage.
For those heating with natural gas, the bill just arrived. While it has been mild the last couple of weeks, it was downright cold between Thanksgiving and Christmas. From speaking with my Dad in MO and friends here in CO, I suspect the typical utility bill is running upwards of $75 to $100 more than last year. With all the gloom and doom we heard about heating cost people probably pulled back somewhat. Now that have the data right in their hands.
Also add the change in credit minimum payment to the list.
Don't know what to say, haven't got Schumer's talking points email today.
Exactly!!!
Figures....LOL
Yet, the average American household still maintains 57% equity in their home while home ownership has climbed to an all time high of about 70%. Homeowner equity accounts for just 21% of our total household net worth. The average American family has a lot of assets other than their home.
You guys want to believe that the average American is drowning in debt and that American's just don't save anymore. Unfortunately, you cannot offer any data, from a reputable source, to back you up.
LOL...the doom&gloomers are so brainwashed, they can't see the forest for the trees and in their world, there aren't even any trees.
I think all they see when they open their eyes is bark.
I think that you are correct...as usual. :-)
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