Consumer Debt Drop

For seven consecutive months, Americans have significantly increased their borrowing. However, in May of this year, we increased it less than we have been. May showed a 2.4 percent annual rate in May, which was significantly lower than the large jump in April. The Federal Reserve announced that April was much higher with a 5.2 percent rise.

The Federal Reserve showed that the slowdown was due to a weakness in auto loans, which can directly correlate to the increased gas prices. Economists feel that this is just one more step in the trend of our economy taking a slower increase, as consumers are looking to save money to offset the prices at the pump.

Non-revolving loans, such as car loans, fell 2% - showing a weakness not felt since a 5.9% drop in October. Credit cards and other types of revolving debt increased 9.9% - which was the largest jump since a 13.5 increase in October. Economists and analysts feel that a more moderate approach to consumer debt will be the trend of the future. ■