Business Insights: Installment Credit — Benefits and Burdens
Consumption spending, led by autos and
other durables, rose 11 percent in 1977. As in
1976, spending rose somewhat faster than disposable
(after tax) personal income. As a
result, the rate of savings—disposable income
not spent on consumption—declined to 5.1
percent, the lowest ratio in 14 years. Many
households would have been unable to
manage purchases of cars, expensive
vacations, medical bills, and college fees had
it not been for the availability of instalment
loans.
