U.S. consumer credit falls for third straight month

Special Report:Global Financial Crisis

WASHINGTON, Feb. 6 (Chinese media) -- U.S. consumer credit

dropped at an annual rate of 3.1 percent in December 2008, the third straight

monthly decline, the Federal Reserve reported Friday.

The three consecutive months of declines was the

longest stretch of weakness in U.S. consumer credit since a seven-month plunge

that ended in December 1991.

In dollar terms, consumer credit fell by 6.6 billion

dollars at an annual rate in December, nearly double what analysts expected. The

more-than-expected decline followed an 11-billion-dollar drop in November that

was the biggest monthly plunge on records going back to 1943.

The December drop left total consumer borrowing,

which the Federal Reserve defines as all loans not secured by real estate, at an

annual rate of 2.56 trillion dollars at the end of the month.

For December, consumer borrowing in revolving loans,

a category that includes primarily credit card debt, declined by 7.8 percent at

an annual rate. Borrowing in this category dropped 8.5 percent in November.

Demand for nonrevolving credit used to finance cars,

vacations, education and other things, meanwhile, edged down 0.2 percent,

compared with a bigger 3.1 percent decline in November.

Consumer credit reflects the situation of consumer

spending, which accounts for two-thirds of overall U.S. economic activity and is

a major force driving the economy to grow.

Squeezed by rising job layoffs, falling home prices

and a severe credit crunch, Americans cut their spending in the fourth quarter

by 3.5 percent, the second straight quarterly drop. That was the first

back-to-back declines since the 1990-91 recession.

Consumer borrowing is unlikely to rebound anytime

soon as the recession is deepening and job layoffs are rising, economists

believe.