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US DATA: Consumer Credit Soared In December, Led By Credit Card Rebound

US DATA
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Consumer credit outstanding soared by a record $40.8B in December, blowing past the expected rise of $15.5B and a sharp reversal higher from November's $5.4B drop. 

  • The rise was driven by revolving credit (largely made up of credit cards), which rose by a record $22.8B, more than reversing November's $13.8B drop (which had been the biggest fall in 54 months). Non-revolving credit (which includes auto loans) also jumped by an impressive $18.0B (accelerating from November's $8.5B).
  • The solid end fo the year brought total consumer credit growth in 2024 to 2.4% Y/Y, a slight slowdown from 2.6% in 2023 but up from the mid-year post-pandemic low of 1.5%. That included rises of 4.8% for revolving credit and 1.6% for non-revolving.
  • While such large monthly gains are unlikely to be repeated, particularly with the Fed easing cycle pausing, but the latest pickup could reflect some relief amid 100bp of Fed rate cuts.
  • Indeed, the growth defies higher interest rates on credit card loans (around 23% on average in November vs 16% in early 2022 before the Fed's hiking cycle), as well as rising delinquencies.
  • But with consumer demand remaining very strong at the end of last year, the Fed's Senior Loan Officer Survey showing loosening loan standards and a pickup in loan demand, and household finances in solid shape on aggregate, consumer credit flows may be past their lows.
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Consumer credit outstanding soared by a record $40.8B in December, blowing past the expected rise of $15.5B and a sharp reversal higher from November's $5.4B drop. 

  • The rise was driven by revolving credit (largely made up of credit cards), which rose by a record $22.8B, more than reversing November's $13.8B drop (which had been the biggest fall in 54 months). Non-revolving credit (which includes auto loans) also jumped by an impressive $18.0B (accelerating from November's $8.5B).
  • The solid end fo the year brought total consumer credit growth in 2024 to 2.4% Y/Y, a slight slowdown from 2.6% in 2023 but up from the mid-year post-pandemic low of 1.5%. That included rises of 4.8% for revolving credit and 1.6% for non-revolving.
  • While such large monthly gains are unlikely to be repeated, particularly with the Fed easing cycle pausing, but the latest pickup could reflect some relief amid 100bp of Fed rate cuts.
  • Indeed, the growth defies higher interest rates on credit card loans (around 23% on average in November vs 16% in early 2022 before the Fed's hiking cycle), as well as rising delinquencies.
  • But with consumer demand remaining very strong at the end of last year, the Fed's Senior Loan Officer Survey showing loosening loan standards and a pickup in loan demand, and household finances in solid shape on aggregate, consumer credit flows may be past their lows.
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