Consumer borrowing: Taking credit
Consumers tiptoe back towards borrowing, but not for houses
May 5th 2011 | WASHINGTON, DC | from the print edition
AMERICA’S economic recovery will soon be two years old, yet it remains disappointingly weak. That is due, more than anything, to the painful process of deleveraging, as banks and borrowers
work off a mountain of debt.
There are, however, glimmers of a turn-around. A survey released on May 2nd by the Federa
l Reserve found more banks easing standards for consumer loans than at any time since 1994.
And sure enough the figure for consumer loans excluding property has risen in recent months (see chart).
The data reveal telling cross-currents: rising confidence and incomes are delivering a boost to some forms of credit, even as a fundamental shift in attitudes, born of the recession, continues to chip away at America’s culture of borrowing.