Washington, DC, January 11, 2006--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 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.
