Washington Consumers, less confident about the nation's economy, tightened their belts in December, borrowing money at the slowest pace in more than a year.
Consumer credit increased by a seasonally adjusted $3 billion in December, or a 2.4 percent annual rate, the Federal Reserve reported Wednesday. That was down from a breakneck 11.1 percent rate in November.
Analysts expected borrowing to grow more slowly given a plunge in consumer confidence, a volatile stock market, slowing job growth and higher energy prices. All these factors tend to make people less inclined to spend.
Both the $3 billion increase in borrowing and the 2.4 percent rate were the least since September 1999, when borrowing rose by $1.8 billion, a 1.6 percent rate.
In December, consumers curbed many uses of credit.
Demand for nonrevolving credit such as loans for new cars, vacations and other big-ticket items rose by $1 billion, at an annual rate of 1.5 percent in December. That was down from $7.9 billion and an 11.1 percent rate the month before.
Demand for revolving credit, such as that used for credit cards, rose by almost $2 billion, or at a 3.6 percent rate in December, down from $6 billion and an 11 percent rate in November.
The Fed's report on consumer credit includes credit card debt and loans for autos, boats and mobile homes. It does not include loans backed by real estate, such as home mortgages or home equity loans.
The Federal Reserve, trying to prevent the weakening economy from slipping into a recession, cut interest rates again last week, the second half-point cut in January.
Last year, the Fed was worried that the economy was growing too fast. Between June 1999 and May 2000, the central bank boosted interest rates six times to slow growth. Now, the Fed and analysts believe those rate cuts may have gone too far in cooling the economy.