The Federal Reserve Board said Wednesday that demand for commercial loans increased nationwide during the past six weeks but that consumers sought less credit.
Commercial loan volume was up in the Cleveland, Philadelphia, Kansas City, Chicago, St. Louis, and Atlanta districts. No district reported lower demand.
Chicago-area companies used the increased credit to finance mergers and to buy commercial real estate, the Fed reported in its periodic Beige Book review of the country's economy. Commercial and industrial loans on the books of several large banks in the St. Louis district rose 2.4% from the similar period last year.
Consumer lending slowed in the Atlanta, St. Louis, and Cleveland districts because of a deterioration in personal finances and increased credit restrictions. It increased in New York and Richmond, Va.
"It appears to us that consumers are shoring up their balance sheets," said American Bankers Association senior economist Robert W. Strand. "Overall, the economy remains quite healthy, though the stock market this week spooked us a bit."
Residential mortgage demand was strong in the Chicago and Richmond districts, up slightly in Atlanta, but slower in Dallas. Officials at several big banks in the St. Louis district said they were worried that deposits are increasingly difficult to obtain.
A survey of loan officers at small and midsize banks in the New York district found 29% expressing a greater willingness to lend despite slimmer margins.