Business Insights: Installment Credit — Benefits and Burdens
George W. Cloos, William R. Sayre
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.
