Consumer borrowing in U.S. increases as credit-card use picks up

WASHINGTON – Consumer borrowing in the U.S. climbed in December as Americans boosted their credit-card use by the most in eight months.

The $14.8 billion increase in total credit, or an annualized 5.4 percent, followed a revised $13.5 billion advance in November, Federal Reserve figures showed Friday in Washington. For all of 2014, borrowing increased 6.9 percent after 6 percent a year earlier.

An improving job market and cheaper gasoline gave consumers the impetus to spend during the holiday-shopping season, allowing fourth-quarter household purchases to rise at the fastest clip in almost nine years. A separate report Friday showed employers added more jobs than forecast last month and wages picked up.

The median forecast of 34 economists called for a $15 billion advance in borrowing in January. Estimates ranged from increases of $12 billion to $22 billion. The report doesn’t track mortgages, home-equity lines of credit, or other real estate-backed debt.

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Revolving debt, including credit-card balances, increased $5.8 billion in December after a $945 million decline the prior month.

Non-revolving credit, which includes car and education loans, rose $9 billion in December, the smallest gain since February 2012, after advancing $14.4 billion in the previous month. Autos sold at a seasonally adjusted 16.8 million, down from 17.1 million in November, according to data from Ward’s Automotive Group.

Federal lending to consumers, which mostly entails school tuitions, increased by $5.1 billion before seasonal adjustments, after rising $5.8 billion in November.

Non-revolving loans

Student loans in the fourth quarter increased to $1.32 trillion from $1.31 trillion in the prior three months. Borrowing for the purchase of motor vehicles rose to $955.5 billion last quarter after $943.8 billion from July through September.

Payrolls climbed 257,000 in January, capping the biggest three-month gain in 17 years, according to a Labor Department data on Friday. Upward revisions to the previous two months added 147,000 more jobs than initially reported.

Wages increased by the most since 2008. Sustained gains in employment and a pickup in wages are creating a virtuous cycle as Americans spend newfound incomes on goods and services.

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