WASHINGTON, Feb 7 - U.S. consumer credit expanded much
more than expected in December, a positive signal for the
economy as people used their credit cards more and borrowed
money to buy cars and go to school.
Total consumer credit grew by $19.31 billion, more than
twice the $7.7 billion increase expected by analysts in a
Non-revolving credit, which includes auto loans as well as
student loans made by the government, accounted for the bulk of
the increase as outstanding credit rose $16.55 billion during
the month. That was the biggest increase since November 2001,
when credit was surging in the wake of the September 11 attacks
in New York and Washington.
But revolving credit, which mostly measures credit-card use,
also climbed in December. It rose $2.76 billion for its fourth
straight monthly gain.
Economists saw the increase as a sign that households were
less uneasy over taking on debt as the labor market slowly heals
from the 2007-09 recession.
"The recent gains in revolving credit shows increasing
confidence on the part of households primarily due to improving
labor market conditions," economists at Credit Suisse said in a
note to clients.
The U.S. unemployment rate has fallen sharply in recent
months but remains well above pre-recession levels. The jobless
rate dropped to 8.3 percent in January, down from 9.1 percent in
JPMorgan economist Daniel Silver said the increase in
non-revolving credit might be related to higher auto sales after
supply chains were disrupted by an earthquake in Japan in March