Consumer Borrowing Jumps in December
Demands for auto, student and credit card loans experienced significant increases in December, according to the latest figures from the Federal Reserve.
Consumer credit increased $18.8 billion in December, an annual rate of 7.3%. This was the biggest increase in 10 months. Over $13 billion of this increase came from the category that includes student and auto loans.
Revolving credit, the majority of which is credit card debt, increased at an annual rate of 7% with a jump of $5 billion in December. This was the third largest gain during the recovery and the largest jump since May. Some analysts believe this could be a positive sign for the future of the economy.
Credit card debt is nearly 16% below the high of $1 trillion in July 2008. Credit card borrowing has increased just 1.9% since December 2012.
Consumer borrowing plummeted after the Recession of 2008. Households and banks became more cautious in borrowing and lending, and both have been slow to recover.