Consumers Boost Installment Debt 11.6% in Month

Americans increased their short-term installment debt by 11.6% at an annual rate in May, up from a revised 9.4% in April, the Federal Reserve Board said Tuesday.

Consumer installment credit outstanding at the end of May increased by a seasonally adjusted $5.39 billion from the previous month to $560.62 billion, following a revised 4.3% gain in April, the Fed said in a statistical report.

Extended for 12 months, the annual rate of change was 11.6%, the highest since January of this year.

Automobile loans outstanding increased $2.82 billion, following a revised $878-million gain in April, the report said. Total auto credits outstanding came to $218.06 billion at the end of May.

Revolving credit expanded by $925 million to $124.37 billion, following a $1.31-billion expansion in April, the Fed said.

Miscellaneous other credit outstanding rose $1.65 billion to $192.69 billion, following a revised $2.18-billion rise in April, the Fed said. Outstanding mobile home loans declined $8 million to $25.5 billion, following a revised $71-million drop in April.

The relatively high level of consumer debt in relation to personal income, which has risen at a slower pace in recent months, reflects consumer confidence that the economy will continue to expand.

Some economists worry, however, that consumers have taken on about as much debt as they can sustain, casting doubt on prospects for continued demand for consumer goods.