Consumer credit in the U.S. declined less than forecast in October, a sign the financial crisis is easing and households are gaining confidence the economic expansion will take hold.
Credit fell by $3.51 billion, or 1.7 percent at an annual rate, to $2.48 trillion, according to a Federal Reserve report released Monday in Washington. Borrowing dropped by $8.77 billion in September, less than previously estimated.
The worst recession since the 1930s eased at mid-year with the help of government spending programs. The recovery will get more of a lift from consumer purchases, which account for about 70 percent of the economy, as the labor market improves.
Revolving debt, such as credit cards, fell by $6.95 billion in October, according to the Fed's statistics.
Non-revolving debt, including auto and mobile-home loans, increased by $3.44 billion. The Fed's report doesn't cover borrowing secured by real estate.
Economists forecast consumer credit would drop by $9.4 billion in October, according to the median of 34 estimates in a Bloomberg News survey.
Projections ranged from declines of $4 billion to $15 billion. The Fed previously reported that consumer credit declined in September by $14.8 billion.
Consumer credit peaked at $2.6 trillion in July 2008, and fell as the recession deepened. Credit has declined for nine straight months, the longest stretch on record.
Credit-card defaults may match a record reached earlier this year as more consumers fell behind on payments in October and unemployment surged above 10 percent, Fitch Ratings said Dec. 2.
