Consumer debt load is rising again despite a steady decline in confidence
WASHINGTON -- Watch what consumers do and not what they say.</br></br>Despite steady drops in consumer confidence since the start of the year, consumers are borrowing again. Consumer installment credit has been rising at a fairly strong clip since December, in fact, its fastest growth rate since 1989.</br></br>Yesterday, the Federal Reserve said the debt loads of Americans fell in May by $802 million, or at an annual rate of 1.3%, but the central bank blamed the drop on a statistical quirk. The Fed said the decline came about when $3 billion of loans were sold to groups outside the scope of its survey. If these loans had been counted in the survey, the report would have shown the tenth increase in a row.</br></br>Auto loans in May rose a healthy $1.73 billion, or 7.9% at an annual rate, while credit-card debt and other revolving credit were up $942 million, or an annual rate of 4.3%.</br></br>"The overall dip is nothing to be concerned about," said Richard Berner, chief economist at Mellon Bank in Pittsburgh. "This doesn't indicate any real retrenchment."