Consumer Debt Jumps Sharply During Month

Americans took out $4.45 billion more in debt than they paid off in December, the biggest monthly increase in three months, the government reported Friday.

The Federal Reserve said consumer debt grew at a seasonally adjusted annual rate of 8.8% in December, following an increase of $2.63 billion in November, which translated into a 5.2% annual rate.

The December increase was the biggest advance since debt rose by $6.43 billion in September. In both months, the gains were strongly influenced by an upturn in car sales.

In December, auto loans rose by $2.52 billion, an 11.7% annual rate, following a much smaller $424-million increase in November.

The category that includes credit card debt increased in December by $2.32 billion, a 19.4% annual rate. It followed a November increase of $477 million.

Economists said they viewed the December increase as more of an aberration from a long-term trend toward lower consumer spending.

“People went out and shopped at Christmas, but they were more cautious about making long-term commitments because they knew the economy could go sour this year,” said Michael Evans, head of a Washington forecasting firm.

The debt category that includes loans from banks and credit unions not secured by real estate fell by $273 million in December following a $1.68-billion advance in November.

The various changes left total consumer debt at $612.57 billion at the end of December, up 6% from a year earlier.