Consumer Borrowing Drops Again

WASHINGTON — Consumer borrowing fell in November for a second straight month, the first time that has occurred in more than 13 years.

The Federal Reserve reported Monday that borrowing declined at an annual rate of $648.8 million in November following a record rate of decline of $8.4 billion in October.

The weakness in November caught analysts by surprise. They had been expecting a rebound in borrowing because consumer spending and consumer confidence both revived in November, reflecting a drop in gasoline prices.

The $8.4-billion rate of decline in borrowing in October was a record for a single month and reflected a sharp drop in auto sales, which had soared during the summer as automakers offered attractive sales incentives.

Expressed in percentage terms, consumer credit edged down at an annual rate of 0.4% in November after having fallen at a 4.7% rate in October.

Analysts said the slowdown in borrowing reflected the weaker auto sales and also a greater reliance by consumers on home equity loans, which are not measured in the Fed statistics.

Consumer credit posted sizable gains in July and August -- above 6% -- reflecting the surge in auto sales. In September, consumer credit rose at an annual rate of 2.8%.

By category, credit card debt and other revolving loans edged up at an annual rate of 0.5% in November after having fallen by 2.8% in October.

Nonrevolving debt, the category that includes auto loans, fell for a third consecutive month, dropping 0.9% in November after having declined 5.8% in October and 0.3% in September.