From The Los Angeles Times, 8/8/06:
http://www.latimes.com/business/investing/la-fi-credit8aug08,1,1217902.story?coll=la-headlines-business-invest&ctrack=1&cset=true

Consumer Debt Jumps Sharply

The increase suggests that Americans are relying more on credit cards
as gasoline costs rise, economists say.

From Bloomberg News
August 8, 2006


Consumer borrowing unexpectedly accelerated in June as Americans used
credit cards to finance more of their purchases, a Federal Reserve
report showed Monday.

Consumer credit, or non-mortgage loans to individuals, rose $10.3
billion to $2.19 trillion, following a revised $5.89-billion increase
in May.

The two-month gain was the biggest since September-October 2004.

Americans are relying more on credit card debt because rising interest
rates and a cooling housing market make it harder for them to take out
home-equity loans.

Higher prices at filling stations are also prompting consumers to
borrow more, economists said.

"The jump in consumer credit coming at a time when consumers are hard
hit by soaring gasoline costs could indicate some financial woes on
the part of borrowers," said Chris Rupkey, an economist at Bank of
Tokyo-Mitsubishi UFJ Ltd. in New York.

"It looks as if consumers are relying more on credit cards now that
other avenues of credit such as mortgage refinancing have been shut
off to them."

Consumer credit was expected to rise $3.6 billion in June following an
originally reported $4.4 billion increase in May, according to the
median forecast in a Bloomberg News survey of 36 economists.

Revolving debt, such as credit cards, rose by $6.65 billion in June
after rising $7.42 billion in May, Monday's report showed.

Non-revolving debt, such as loans to buy cars and mobile homes, rose
by $3.62 billion in June after declining $1.54 billion a month
earlier.

Overall U.S. consumer debt rose at an annual rate of 5.7% in June.

The Fed's campaign to quash inflation has driven up the cost of credit
card borrowing.

The average rate on a credit card increased to 13.14% in May 2006 from
12.76% a year earlier, according to Federal Reserve statistics.

Fed policymakers, who meet today, are likely to leave the benchmark
interest rate at 5.25%, according to a Bloomberg News survey of
economists, as they pause to assess the effect of past increases on
the economy.

The economy expanded at a 2.5% annual pace in the second quarter, down
from growth of 5.6% in the previous three months, as consumers put the
brakes on spending.

A gain in sales of motor vehicles may have contributed to the increase
in non-revolving debt. Automakers sold cars and light trucks at an
annual rate of 16.3 million units on June, compared with 16.1 million
in May, according to Bloomberg data.

A cooling housing market is reducing demand for home-equity loans.

Sales of existing homes, which make up 85% of the market, fell 1.3% in
June to the lowest level in five months.

__________________________________________________________

Harry

From The Los Angeles Times, 8/8/06:
http://www.latimes.com/business/investing/la-fi-credit8aug08,1,1217902.story?coll=la-headlines-business-invest&ctrack=1&cset=true

Consumer Debt Jumps Sharply

The increase suggests that Americans are relying more on credit cards
as gasoline costs rise, economists say.

From Bloomberg News
August 8, 2006


Consumer borrowing unexpectedly accelerated in June as Americans used
credit cards to finance more of their purchases, a Federal Reserve
report showed Monday.

Consumer credit, or non-mortgage loans to individuals, rose $10.3
billion to $2.19 trillion, following a revised $5.89-billion increase
in May.

The two-month gain was the biggest since September-October 2004.

Americans are relying more on credit card debt because rising interest
rates and a cooling housing market make it harder for them to take out
home-equity loans.

Higher prices at filling stations are also prompting consumers to
borrow more, economists said.

"The jump in consumer credit coming at a time when consumers are hard
hit by soaring gasoline costs could indicate some financial woes on
the part of borrowers," said Chris Rupkey, an economist at Bank of
Tokyo-Mitsubishi UFJ Ltd. in New York.

"It looks as if consumers are relying more on credit cards now that
other avenues of credit such as mortgage refinancing have been shut
off to them."

Consumer credit was expected to rise $3.6 billion in June following an
originally reported $4.4 billion increase in May, according to the
median forecast in a Bloomberg News survey of 36 economists.

Revolving debt, such as credit cards, rose by $6.65 billion in June
after rising $7.42 billion in May, Monday's report showed.

Non-revolving debt, such as loans to buy cars and mobile homes, rose
by $3.62 billion in June after declining $1.54 billion a month
earlier.

Overall U.S. consumer debt rose at an annual rate of 5.7% in June.

The Fed's campaign to quash inflation has driven up the cost of credit
card borrowing.

The average rate on a credit card increased to 13.14% in May 2006 from
12.76% a year earlier, according to Federal Reserve statistics.

Fed policymakers, who meet today, are likely to leave the benchmark
interest rate at 5.25%, according to a Bloomberg News survey of
economists, as they pause to assess the effect of past increases on
the economy.

The economy expanded at a 2.5% annual pace in the second quarter, down
from growth of 5.6% in the previous three months, as consumers put the
brakes on spending.

A gain in sales of motor vehicles may have contributed to the increase
in non-revolving debt. Automakers sold cars and light trucks at an
annual rate of 16.3 million units on June, compared with 16.1 million
in May, according to Bloomberg data.

A cooling housing market is reducing demand for home-equity loans.

Sales of existing homes, which make up 85% of the market, fell 1.3% in
June to the lowest level in five months.

__________________________________________________________

Harry