Washington, D.C. Consumer borrowing fell for a third straight month in December, the longest stretch in 17 years, as U.S. households continued to cut spending.
The Federal Reserve said Friday that consumer borrowing dropped at an annual rate of 3.1% in December. The $6.6 billion decline was nearly double what analysts expected. It followed an $11 billion drop in November that was the biggest monthly plunge on records going back to 1943.
The weakness in December reflected a big 7.8% decline in the category that includes credit-card debt, and a 0.2% drop in the category that includes auto loans.
The cutback in consumer spending, which accounts for about 70% of economic activity, is the major reason the overall economy, as measured by the gross domestic product, contracted at an annual rate of 3.8% in the final three months of last year. That was the biggest drop in the GDP since 1982.