U.S. Consumer Credit Usage Continues Strong in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Nonrevolving credit remains robust.
- Revolving credit growth slows.
Consumer credit outstanding increased $18.9 billion during December following a record $38.8 billion November surge, revised from $40.0 billion. Last year's 5.9% gain was the strongest since 2016. A $21.4 billion December rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income rose to 24.3% in December, the highest level since March 2020.
Nonrevolving credit usage grew $16.8 billion (5.7% y/y) in December following a $19.5 billion November increase. During all of last year nonrevolving credit balances rose 5.7%, the quickest increase since 2016. Federal government borrowing, which issues over 40% of nonrevolving credit, grew a steady 4.1% y/y. Depository institution loans (26% of credit) grew an accelerated 8.8% y/y, up from 2.7% in 2020. Finance company borrowing (17% of loans) rose 5.8% y/y, quicker than the 3.6% growth in 2020. Credit union loans (14% of the total) increased 5.7% y/y, the quickest since 2018.
Revolving consumer credit balances increased $2.1 billion in December after surging $19.3 billion in November. During all of last year, revolving credit rose 6.6% after falling 11.1% in 2020. Credit provided by depository institutions (90% of the total and mostly credit card debt) rose 7.3% y/y after an 11.0% decline in 2020. Credit union borrowing (6% of the total) rose 5.5% y/y after falling 6.4% in 2020. Nonfinancial business loans (2% of the total) held steady y/y. The value of finance company loans (2% of loans) declined 21.4% y/y following a 21.9% shortfall in 2020.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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