Investors and many others are again busy trying to guess which way consumers are headed, since that is also where the nation's economy is going.

Minor excitement was stirred in the financial markets Friday when the government reported that retail sales had increased by a more-than-expected 0.7% in September, led by higher vehicle sales.

That worried some who are fearful that the economy is not slowing quickly enough to a sustainable noninflationary growth rate and that the Federal Reserve will thus have to raise interest rates.

But most economists were sanguine, saying a wider view shows the economy on a steady course.

"Consumption was up a tad in September but not to a level that ought to raise concerns," said Wayne M. Ayers, chief economist at Bank of Boston Corp. "This economic expansion is in its sixth year, and most pent-up demand has been satisfied."

Bruce Steinberg, macroeconomist at Merrill Lynch & Co., pointed out that, while retail sales had risen in September, sales data were revised sharply lower than in the initial reports for July and August. "Consumer spending was extremely weak in the third quarter," he said.

"We estimate that gross domestic product grew at a sluggish 1.7% rate in the third quarter," he said, "and most of that resulted from inventory building. That implies a subdued fourth quarter as well."

Indeed, consumption growth has slowed considerably from earlier in the year, according to David A. Levy, who prepares the Industry Forecast newsletter of the Levy Economics Institute at Bard College, Annandale, N.Y.

"Consumers are saving more at the expense of business sales and profits," he said.

The latest consumer credit figures are telling, according to Jonathan Basile, an economist at HSBC Markets. He noted that total consumer credit rose 0.3% in August, after rising 0.6% in the prior two months.

"The August rise was the slowest since May 1993," he said. "On a year- over-year basis, consumer credit was up 10.1% in August, down from the peak rate of 15.4% reached in July 1995," he said.

Not surprisingly, revolving, or credit card, debt accounted for nearly all the gain in August, while other areas were flat. The revolving credit sector rose at a 16.1% year-over-year pace in August, while automobile lending, for example, barely rose at all.

In general, Mr. Levy said, the outlook for consumer expenditures now seems much weaker than it did last spring, "in light of data on household debt, delinquencies, bankruptcies, low rates of principal repayments, the concentration of financial problems among middle- and low-income households, the long duration of this consumer credit cycle, and stricter lending criteria."

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