Consumer Credit Rises $6.09 Billion In December, First Revolving Credit Increase Since August 2008
After it was already confirmed that December was a subpar month for US retailers (whether snow can be blamed or not is irrelevant), and less money than expected was spent (it's ok, we no longer need the US consumer to lead the economy - the Fed is buying all the debt, it can also buy everything else), we finally get our first glimpse as to how even the week consumer performance in December was funded. Two words: "Charge it." Total US Consumer Debt in December rose by $6.09 billion December, on expectations of a $2.4 billion increase (and $4 billion higher than November's revised $2.022 billion). Yet what is most notable is that while Non-revolving loans increased by $3.8 billion (the lowest in the past 4 months), revolving loans posted their first increase since August 2008, increasing by $2.3 billion. Is the US consumer so tapped out that it is time to go to the credit card once again? And if so, does this mean that the drop off in excess reserves by over $180 billion compared to where they should be has been due to consumer lending. If that is the case, we may be far closer to Bernanke losing control of the trillions in excess reserves (and a surge in "velocity" or however one calls this archaic construct) than we had expected previously.