WASHINGTON: Consumer credit in the U.S. dropped in September for the first time since March and its biggest decline since April 1992, according to the Federal Reserve.
The Fed said consumer borrowing fell by $1.2 billion, which is at an annual rate of 0.6 per cent, during the month, bringing the total consumer credit to $2.3 trillion. In August, there had been a 4.2 per cent increase in borrowing.
The central bank said the fall had been as a result of decline in availing of loans for cars, boats, education purposes and holidays. Car loans fell at an annual rate of 3.2 per cent, compared to an increase of 3.5 per cent in August.
Credit card borrowing, on the contrary, had shown an increase, 4 per cent at an annual rate, or $2.9 billion. In August, the growth had been at 6.7 per cent.
Economists feel declining house prices had been one concern among consumers in spending as reduced house prices made them feel less wealthy. Estimates are that property prices fell by almost 10 per cent in September. Some of them are of the opinion that the recent declines in gasoline and other energy costs should help consumer spending in the months to come and prevent possible recessionary trends.
The Fed's analysis does not cover mortgages or other loans secured by real estate.
