Consumer borrowing reported up for April
6/8/2010WASHINGTON - Consumer borrowing rose slightly in April, a sign Americans may have more faith in the economic recovery.
Borrowing rose by $954.8 million in April, the Federal Reserve said yesterday. But the government revised away a gain it had reported for March. Instead, it reported that credit fell a sharp $5.44 billion during that month.
The April increase, if it stands, would be only the second gain in the past 15 months. Economists hope households will soon feel confident enough to borrow more and help sustain the recovery.
Consumer credit also rose in January. Beyond the January and April gains, consumer credit has posted a string of declines that started in February, 2009. Households have cut back on spending to repair battered balance sheets. The April gain was a 0.5 percent increase.
The strength in April reflected a 7.1 percent rise in nonrevolving credit, the category that includes auto loans. Auto spending has been boosted in recent months by incentives offered by automakers.
Revolving debt, which includes credit-card borrowing, plunged 12 percent. That was the 19th consecutive decline in this category.
Tighter credit conditions imposed by many banks could constrain the rebound. Economists fear less borrowing could hamper overall growth.