US Consumer Credit Rose a Solid $9.7 Billion in December

US Consumer Credit Rose a Solid $9.7 Billion in December
Spread of credit cards on keyboard. (Damien Meyer/AFP/Getty Images)

WASHINGTON—U.S. consumers increased their borrowing in December by $9.7 billion, as Americans took out loans to buy autos or finance their educations.

But credit card use declined for the third-consecutive month.

The rise in total borrowing in December was down from a gain of $13.9 billion in November, the Federal Reserve reported Friday.

The slowdown came as the category that includes credit cards fell by $2.95 billion in December. That category has been up only two months over the past year as households eased off their use of their cards in the midst of a pandemic-induced recession.

The report showed that borrowing in the category that covers auto and student loans rose by $12.7 billion in December, slightly lower than the $14.6 billion gain in November. That category has fallen only once over the past 12 months.

Consumer borrowing is a closely watched indicator of the willingness of households to borrow to bolster their spending, which accounts for 70 percent of economic activity.

Last week, the government reported that the overall economy expanded at an annual rate of 4 percent in the October-December quarter, a significant slowdown from a record 33.4 percent rate of gain in the third quarter.

The slowdown reflected in large part a drop in the growth of consumer spending to a rate of 2.5 percent in the fourth quarter, down from a record surge of 41 percent in the third quarter.

By Martin Crutsinger