Consumer Credit in U.S. Rose Least in Three Months in December

(Bloomberg) -- U.S. consumer debt rose in December by the least in three months as credit card spending and other borrowing softened, indicating consumption is slightly less robust though still intact.

Total credit rose $16.6 billion from the prior month, slightly below the median estimate of economists, following an upwardly revised $22.4 billion gain in November, Federal Reserve figures showed Thursday. Credit-card debt outstanding and non-revolving credit both rose the least since September.

Key Insights

  • This credit report may carry more weight than usual for analysts and investors as the release of the December retail sales report was delayed by the government shutdown.
  • While weaker than expected, the data still point to a confident consumer, buoyed by tax cuts and a solid labor market that recently added the most jobs in nearly a year. The report suggests consumers likely helped keep the economy humming in the fourth quarter, though analysts expect consumption to cool in 2019.
  • Revolving credit outstanding, which includes credit card debt, increased $1.7 billion after a $4.8 billion rise. The data show Americans borrowed more cautiously during the holiday season.
  • Non-revolving debt outstanding climbed $14.8 billion after a $17.6 billion gain. Such debt includes loans for school and automobiles.

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  • Lending by the federal government, which is mainly for student loans, rose by $5.2 billion before seasonal adjustment.
  • Credit increased at a seasonally adjusted annual rate of 5 percent, after 6.8 percent in the prior month.
  • The consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.

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