Consumer Borrowing Increased In December

Consumer borrowing increased in December, up $18.4 billion vs an upwardly revised $31.0 billion in November which is the largest monthly increase since a break in the series 7 years ago. Revolving credit, a component that tracks credit-card debt, rose a sizable $5.1 billion following a November spike of $11.0 billion. On an annualized basis, revolving credit rose at a 6.0 percent pace in December.

Non-revolving credit rose at a 5.7 percent pace in the month and in month-to-month dollar terms rose $13.3 billion. Gains in this component, which is nearly triple the size of the revolving component, were split between student loans and especially vehicle financing.

The gain for revolving credit does suggest that those shoppers who are cash strapped turned to their credit cards to do their share to fund the holiday shopping season.

Recent History Of This Indicator:
Consumers are not only been dipping into their savings, they've also been drawing on their credit cards to an increasing degree as revolving credit rose $11.2 billion in November and made a sizable contribution to total credit outstanding which climbed $28 billion for a 17-year high. November's rise in revolving credit was the second largest of the post-2008 expansion and hints at less reluctance among consumers to run up credit-card debt. December's total consumer credit outstanding is expected to rise $20.0 billion.