Consumers pulled out their credit cards in December fueling a surge in consumer Credit.
Change in Consumer Credit
- Total: $40.85 Billion
- Revolving: $22.86 Billion
- Nonrevolving: $17.99 Billion
- Nonrevolving Excluding Government: $15.30 Billion
Government debt is the student debt program.
Consumer Credit in Billions of Dollars
Consumer Credit Totals
- Total: 5.146 trillion
- Nonrevolving: 3.763 trillion
- Nonrevolving Excluding Government: $2.244 trillion
- Nonrevolving Government: $1.519 trillion
- Revolving: $1.382 trillion
Real (Inflation-Adjusted) Consumer Credit
Real Consumer Credit Totals
- Total: $4.126 trillion
- Nonrevolving: 3.018 trillion
- Nonrevolving Excluding Government: $1.800 trillion
- Revolving: $1.108 trillion
The winners are those with mortgages who refinanced when mortgage rates fell to 3.0 percent. Inflation ate away much or their debt.
The same is not true for those in the student loan or credit card traps at interest rates that have been generally higher than inflation.
Revolving Consumer Credit in Billions of Dollars
On an inflation-adjusted basis revolving credit does not look so bad. But it’s a disaster for those who carry a balance are are paying interest rates in excess of 20 percent.
The nominal monthly increase of 22.86 billion in revolving credit was higher than the consensus estimate of $16.00 billion for total credit.
This was a stunning number that is sure to put some people in debt trouble or greater debt trouble for those already there.
December Had the Second Largest Monthly Trade Deficit in History
On February 6, I noted December Had the Second Largest Monthly Trade Deficit in History
For those wondering what happened, the surge in consumer credit explains some of it.
The rest is importers scrambling to beat Trump tariffs.