Consumer credit increases for third straight month
Washington, D.C. -- A report released Tuesday by the Federal Reserve said that U.S. consumer borrowing rose in December for a third consecutive month, led by the first increase in credit-card charges in more than two years as holiday sales improved.
Credit rose by $6.1 billion to $2.41 trillion after increasing a revised $2.02 billion in November, according to Federal Reserve data. Economists projected a $2.4 billion increase, according to the median forecast in a Bloomberg News survey. Borrowing remains below the peak of $2.58 trillion in July 2008. For all of 2010, credit contracted.
A thawing of credit makes it more likely that consumer spending, which accounts for about 70% of the economy, will keep increasing after climbing last quarter at the fastest pace in four years, according to Bloomberg.
For all of 2010, credit decreased 1.6% after falling 4.4% in 2009, which was the biggest decline since records began in 1942.
Revolving debt, which includes credit cards, rose $2.32 billion in December, the first gain since August 2008, according to the Federal Reserve data.