Consumer Borrowing Pace Slows in New Figures for March, April

Americans took out $2.73-billion more in consumer debt than they retired in April, a sharp slowing of the borrowing pace of earlier months, the government reported Wednesday.

The Federal Reserve Board said consumer credit in April rose 4.7% on a seasonally adjusted annual rate, down from 6.4% in March and 9.5% in February.

April’s increase was the slowest advance since a 3.5% gain last September and was a sharp retreat from the 8.5% rise in consumer debt during all of 1988.

The report also reflected a sharp downward revision in the level of consumer borrowing in March, which originally was estimated to have grown at a 9.4% annual rate.

Economist Sandra Shaber of the Futures Group in Washington said the report was consistent with a host of other signs that economic growth is slowing as the record peacetime expansion extends into its seventh year.

“We’ve been seeing for a very long time a great deal of caution in consumer borrowing, to the point that debt outstanding is beginning to fall behind the growth in personal income,” Shaber said.

That Americans have kept their borrowing under control so far this year could bode well for healthy consumer spending as the year progresses, she said.

Consumer spending is closely watched as a barometer of the economy’s health because it represents two-thirds of overall economic activity.