from Bloomberg:
U.S. Consumer Borrowing Rose, Led by Credit Cards (Update1)
By Vincent Del Giudice
March 7 (Bloomberg) -- U.S. consumer borrowing rose in January as Americans spent twice as much on their credit cards as they did a month earlier.
Consumer credit increased by $6.9 billion to $2.52 trillion, the Fed said today in Washington. In December, credit gained $3.7 billion, less than a previously reported increase of $4.5 billion. The figures don't include borrowing secured by real estate, such as home-equity loans.
People once dependent on home-equity financing are turning to other forms of short-term financing after the collapse in subprime mortgages made it harder to qualify for loans. Personal income in January rose at a slower pace than inflation, and credit card usage in January rose for a second straight month.
``There's not much gas left in the tank,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``In the early stage of a recession, consumers tend to rely on credit cards to see them through the hard times.''
Economists had forecast January credit would expand by $7 billion, according to the median of estimates in a Bloomberg News survey.
After adjusting for inflation, spending stalled for a second month in January, increasing concern that the economy is headed for a recession. Consumer purchases account for two- thirds of the economy. ........(more)
The complete piece is at:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad.CTXk312Y0&refer=home