The numbers: Total consumer credit rose $18.9 billion in December, down from a torrid $38.8 billion gain in the prior month, the Federal Reserve said Monday.
Economists had been expecting a $24 billion gain, according to the Wall Street Journal forecast.
Consumer borrowing rose at a 5.4% annual rate in December, down from a revised 10.7% gain in the prior month, which was the largest gain since July 2011.
Key data: Revolving credit, like credit cards, rose at a 2.4% rate in December after a 22.8% gain in the prior month. The November gain was the largest since April 1998.
Nonrevolving credit, typically auto and student loans, rose 6% after a 7% growth rate in November. This category of credit is much less volatile.
The data does not include mortgage loans, which is the largest category of household debt.
Big picture: After paying down debt in 2020, consumers resumed borrowing last year, with credit rising by 5.9% to $4.4 trillion. That’s the largest increase in five years.
Economists are watching consumers closely to gauge how strong the economy might be in 2022.
Sal Guatieri, senior economist at BMO Capital Markets, said consumers are being pulled in two directions this year. Rising wealth and high household savings from the pandemic may bolster spending, while inflation, higher interest rates and the suspension of the child tax credit may limit spending.
Market reaction: Stocks closed mixed on Monday, with the Dow Jones Industrial Average DJIA, +0.00% slightly higher and the S&P 500 index SPX, -0.37% lower as investors focused on how global central banks were shifting to combat inflation.