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APRIL CREDIT CHARGES ARE BIGGEST IN DECADE

SHARE APRIL CREDIT CHARGES ARE BIGGEST IN DECADE

Americans piled up huge debts in April, with the biggest increase in borrowing in nearly a decade.

The Federal Reserve said consumer credit rose by $8.9 billion, the 11th consecutive monthly increase and far more than most analysts predicted.The advance, led by a record rise in credit card borrowing, was the largest since consumer credit soared by $11.6 billion in March 1985.

Earlier, the Commerce Department reported that retail sales declined 0.8 percent in April while overall consumer spending for the month slipped 0.1 percent.

Analysts conceded that it seems contradictory that Americans would be piling up debt at the same time they were curtailing spending. But forecasters said the two sets of numbers do not always move in tandem.

"It looks like people are borrowing and not spending," said economist Kurt Karl of the WEFA Group, a forecasting service in Bala Cynwyd, Pa. "It may be people borrowed this month and next they'll pay off the bills."

"Credit can accelerate when the economy is slowing because people don't pay off the balances on their credit cards," said Paul Getman of Regional Financial Associates in West Chester, Pa.

Credit card borrowing set a record by increasing nearly $5 billion in April to $293.8 billion at a seasonally adjusted annual rate, the Federal Reserve said. The skyrocketing 20.7 percent rise at an annual rate accounted for about half the overall increase in credit.

The Fed said that all borrowing rose 13.2 percent at an annual rate, on top of a revised 12.6 percent jump in March and a 6 percent increase in February.

Many economists had estimated that credit rose about $6 billion in April. They expected the total to be held down because Easter came early this year, meaning consumers did much of their holiday shopping in March rather than April.

The Federal Reserve said the latest rise in borrowing brought outstanding debt to a seasonally adjusted annual rate of $817.8 billion in April, up from $808.9 billion.

Auto loans rose at an 11.9 percent annual rate to $287 billion after a 16.2 percent increase in March.

The total of other forms of credit, including loans for mobile homes, education, boats, trailers and vacations, was up 5.5 percent to $236.9 billion, after a 16.6 percent rise in March.

Economists expect consumer spending to increase this spring, but only at a moderate pace.

Consumer spending represents about two-thirds of the nation's economic activity. Consumer credit includes all household debt not secured by real estate, namely home equity loans and mortgages.