• Credit card financing has been falling sharply.

• Nonrevolving credit usage is slowing.

Consumers continue to strengthen their balance sheets. Consumer credit outstanding rose a seasonally adjusted& $9.7 billion (-0.0% y/y) during December following a $13.9 billion November increase, revised from $15.3 billion. A $13.0 billion rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income fell to 23.9% in 2020, an eight year year low, from 25.6% in 2019.

Revolving consumer credit balances eased $3.0 billion (-11.2% y/y) following a $0.7 billion November slip, revised from $-0.8 billion. They have been falling for just under a year. Credit provided by depository institutions (90% of the total and mostly credit card debt), dropped 11.0% y/y. Credit union borrowing fell 7.6% y/y and finance company loans fell 21.9% y/y.

Nonrevolving credit usage increased $12.7 billion (3.9% y/y) after a $14.6 billion November improvement, revised from $16.1 billion. Federal government borrowing, which issues over 40% of nonrevolving credit, grew 4.8% y/y. Depository institution loans (29% of credit) grew a greatly lessened 3.0% y/y, down from 6.8% y/y growth as of December 2019. Finance company borrowing (16.0% of loans) firmed 3.6% y/y and credit union loans (14.0% of the total) increased 4.3% y/y, versus double-digit growth in each year from 2014 to 2018.

Growth in student loans outstanding fell to 3.7% y/y from double-digit increases as of 2011. Growth in motor vehicle loans was fairly steady at 3.5% y/y.

These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology.

The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.