Washington, DC, December 7, 2006-- Outstanding consumer credit fell by $1.2 billion or an annual rate of 0.6% in October, the biggest decline in 14 years, the Federal Reserve reported Thursday.
Consumer credit in September was revised to show a $4 billion gain, or 2%, revised from the earlier $1.2 billion decline, or 0.6% annual. It's the biggest decline in credit since 1992.
In October, revolving credit, such as credit cards, rose $2.9 billion, or 4.1%. That's down from 4.9% in September.
Nonrevolving credit, such as auto loans, fell by $4.2 billion, or 3.3% annual. That's the biggest decline since 1993.
Economists were looking for outstanding credit to grow by $4 billion in November.
The drop in nonrevolving credit reflects the slower pace of auto sales. Revolving credit has also slowed, somewhat surprisingly. Many economists had expected revolving credit to increase as home-equity lines of credit became less available to consumers whose homes are not rising in value as rapidly as before.
But low interest rates have spurred a new burst of home mortgage refinancing in the past few months, allowing consumers to pay off or substitute for higher-cost credit card debt.
