Consumers’ appetite for credit faces a slowdown since December of last year.
U.S. consumer credit increased $14.2 billion in December compared to an increase of $25.2 billion in November, according to the Federal Reserve Board’s Consumer Credit Report released earlier in February.
Total borrowing increased 6.4 percent in 2016; however the growth has slowed compared to 7 percent in 2015 and 7.2 percent in 2014.
Revolving credit increased at an annual rate of 6.75 percent, while non-revolving credit increased at an annual rate of 5.75 percent. In December, consumer credit increased at an annual rate of 4.5 percent according to the Fed.
“Borrowing in the category that covers credit cards slowed to a gain of just $2.4 billion after a surge of $11.8 billion in November. It was the weakest showing since credit card debt fell last February,” The Washington Post reports.
Non-revolving credit, including student loans and auto loans, was approximately $2.8 trillion in December and increased by $11.8 billion from November.
“Economists think growth in consumer credit will remain strong in 2017, reflecting low unemployment and further solid gains in employment and consumer confidence,” according to The Washington Post.
Economists surveyed by Bloomberg said they expected total consumer credit to increase $20 billion in December, and estimates ranged from $10.6 billion to $26 billion, it reports.
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