Consumer Credit: Lower Than Expected As Credit Cards Decline

Bottom Line: Consumer credit rose less than expected, but there were substantial upward revisions to the already strong numbers reported for October and November. Revolving credit, mostly credit cards, was especially strong in November, but the pace of gains slowed in December. For now the overall trend in consumer credit is still towards slower borrowing. Consumer Credit ROSE by $18.4 billion in December, compared with market expectations for an increase of $20.0 billion. However, the prior two months were revised higher by $5.5 billion. Over the past year, consumer credit has increased by $195.7 billion or 5.4%. Revolving Credit, including credit cards, ROSE by $5.1 billion. Over the past year, revolving credit has increased by $58.3 billion or 6.0%. Revolving debt is now close to its 2006-2007 levels and just 0.7% above its July 2008 peak. Non-Revolving Credit, including auto and education loans, ROSE by $13.3 billion. Over the past year, non-revolving credit has increased by $137.5 billion or 5.1%. Of this amount, $97.6 billion, or 71.0%, appears to be due to increases in student loans held by the federal government.