OKLAHOMA CITY – Apparently most of those presents under the Christmas tree last December were purchased with credit cards.
Data released Friday by the Federal Reserve show that total consumer borrowing increased by $22 billion in December, to $4.197 trillion.
The December jump was led by a $12.7 billion (14%) increase in revolving credit, the category that includes credit cards; that was the biggest one-month gain in credit card debt since a $19.5 billion increase in April 1998. December’s surge in plastic purchases followed a $2.9 billion decline in credit card borrowing in November, Fed data show.
Non-revolving credit, the category that includes motor vehicle loans and student loans, increased $9.4 billion, (3.7%) in December, compared to a $14.7 billion gain in November.
Total outstanding revolving credit at the end of December climbed to a record high of almost $1.1 trillion, and non-revolving credit stood at nearly $3.1 trillion.
For the entire year of 2019, revolving credit increased at a pace of 4.2% and non-revolving credit grew at a rate of 4.8%.
Consumer spending accounts for 70% of U.S. economic activity.
Household debt to gross domestic product has been declining since the financial crisis of 2008-09, a sanguine Fed Chairman Jerome Powell said at a Jan. 29 news conference. “It is in a very good place.”
The monthly credit report from the Fed, which is the nation’s central bank, does not include home mortgages nor other debt secured by real estate, such as home equity loans.