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By Jeannine Aversa
The Associated Press
WASHINGTON -- Americans borrowed less freely in February after
ratcheting up new debt the month before, the Federal Reserve reported
Wednesday.
Consumer credit increased at a seasonally adjusted
annual rate of 2.5 percent in February, up by $4.2 billion from
January.
While that marked the smallest increase since November,
it still pushed total consumer credit outstanding to a record
$2.02 trillion in February.
In January, new consumer debt rose at a brisk 9.5
percent rate, or by $15.8 billion -- the biggest increase in eight
months.
The Fed's report includes credit card debt and
loans for such things as boats, cars and mobile homes. It doesn't,
however, include real estate loans, such as home mortgages or
home-equity loans.
Demand for revolving credit, such as credit cards,
increased at a 2.5 percent rate in February, or by $1.6 billion.
That compared with a 12.6 percent growth rate, or an increase
of $7.9 billion, in January.
For nonrevolving credit, which includes loans for
new cars, vacations and education, demand also went up at a 2.5
percent pace in February, or by $2.6 billion. That was down from
$7.9 billion, or a 7.6 percent growth rate in January.
Federal Reserve Chairman Alan Greenspan said American
households' finances generally are in good shape even as they
carry heavy debt loads. Super-low interest rates and extra cash
from refinancing have helped people to manage their debt.
Consumer spending accounts for roughly two-thirds
of all economic activity in the United States, so their behavior
plays an important role in shaping the economy's recovery.
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