Fed Says Business-Loan Demand Climbed Last Quarter as Economy Accelerated

Published on January 30, 2012 by Joshua Zumbrun, Bloomberg Businessweek

(Updates with quote from economist in fifth paragraph.)

Jan. 30 (Bloomberg) — Demand for business loans increased in the fourth quarter as economic growth accelerated, according to a Federal Reserve survey of senior loan officers at banks.

Seventeen of 56 banks reported stronger demand among companies with $50 million in annual sales or more, according to the survey released today in Washington, while six reported weaker demand. Demand among small businesses for loans increased by the most in any quarter since 2005.

Economic growth accelerated last quarter to a 2.8 percent annual rate, the fastest pace since the second quarter of 2010. The expansion still isn’t strong enough to push down an unemployment rate that has been at 8.5 percent or higher for 34 consecutive months, prompting the Fed last week to say its benchmark interest rate will be kept near zero until at least the end of 2014.

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