Consumer credit expanded by $19 billion in December. That's far more than the $7 billion that was expected by economists.
Revolving consumer credit (credit cards) grew by $4.1 billion sequentially, and is basically flat from last year again (up barely).
This is very good news as we work towards ending the balance sheet recession. Nonrevolving credit was the big driver, as revolving credit (mostly credit cards) was flat as mentioned above.
If this larger-than-expected expansion was driven by revolving credit, it'd be easy to hand-wave it away as holiday gift spending. It wasn't. People generally don't play Santa by first taking out a personal loan from the bank.
Instead, longer-term credit fueled the rise. That reality, combined with the fact that it continues a trend, means that people more and more think they are able to take on bigger, more serious loans. Add on top of it the good jobs number from December (and even better jobs number from January), and it's looking like we just might be in the beginning of a real recovery.
It's certainly a fragile recovery, as bad policy from Washington or large shocks from Europe could torpedo it, but it's probably a recovery nonetheless. This is very good news.
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