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The latest figures from the Federal Reserve indicate that consumers are borrowing and spending much less as they work their way through the recession.
According to a report from CNNMoney.com, consumer borrowing fell by $8 billion in November, or 3.7 percent. At the same time, credit card borrowing was down by 3.4 percent, while other borrowing, such as auto loans, was down 2.1 percent, or $5.2 billion.
The report quoted Sean Maher of Moody's as saying that the number show that "consumers are becoming less willing to use credit to sustain spending," and cited the previous expectation among economists that consumer credit levels would not change significantly in November.
Still, the news may not be particularly bad. Observers have warned for years that consumer savings rates were slipping into negative territory, and this trend has been reversing somewhat in recent years as people focus more on debt reduction and hold off on major purchases that require credit.
The numbers do present some short-term concern for businesses however, since many are depending on a revival of consumer spending to help them weather the recession - especially in the aftermath of one of the worst holiday shopping seasons in memory.
Consumers borrowing, spending less
The latest figures from the Federal Reserve indicate that consumers are borrowing and spending much less as they work their way through the recession. According to a report from CNNMoney.com, consumer borrowing fell by $8 billion in November, or 3.7 percent. At the same time, credit card borrowing was down by 3.4 percent, while other borrowing, such as auto loans, was down 2.1 percent, or $5.2 billion.
The report quoted Sean Maher of Moody's as saying that the number show that "consumers are becoming less willing to use credit to sustain spending," and cited the previous expectation among economists that consumer credit levels would not change significantly in November.
Still, the news may not be particularly bad. Observers have warned for years that consumer savings rates were slipping into negative territory, and this trend has been reversing somewhat in recent years as people focus more on debt reduction and hold off on major purchases that require credit.
The numbers do present some short-term concern for businesses however, since many are depending on a revival of consumer spending to help them weather the recession - especially in the aftermath of one of the worst holiday shopping seasons in memory.
