Consumers cut borrowing for fourth month in a row

WASHINGTON -- Consumers trimmed borrowing in May for the fourth straight month as the recession took another bite out of investments and drove unemployment higher.

The Federal Reserve said Wednesday that consumer credit fell at an annual rate of 1.5%, or $3.2 billion, from April. Economists expected a deeper cut of $9.5 billion.

The figures still mark the latest move by consumers to curb borrowing, pay down debt and strengthen household budgets.

The current string of four monthly declines in consumer credit is the longest since June-December 1991, the Fed said. Consumer credit has also declined in eight out of the last 10 months.

Revised data show consumers ratcheted back borrowing at a 7.8% pace in April, or by $16.5 billion. That was a bigger cut than first reported and the largest — in dollar terms — on records dating to 1943. The $15.6 billion drop in March was slightly less than previously reported, but the second largest tally ever.