What's Up With Consumer Credit Numbers?

Moody's Analytics lays out the facts about consumer credit.  Signals?  Mixed.

The stock of U.S. consumer credit rose by $11.6 billion in December, marking the smallest monthly gain since January 2021 and surprising to the downside relative to our and consensus expectations for a more than $20 billion increase.

That's a significant 'downside.'  But there's a very good reason for that:

... Nonrevolving credit, which involves larger loans such as automotive and student loans, drove the slowdown in overall consumer credit growth due in part to a year-end slump in new- vehicle sales....

Makes sense.  New car loans are 'chunks,' whereas credit-card debt is not.  And credit-card debt continues to rise.  But a fall-off in new car (and light truck) sales is not a good thing.

...Revolving credit, which includes households’ credit cards and other forms of short-term debt, also decelerated from the prior month but is still growing at one of its fastest year-over-year rates since the mid-1990s. Though the stock of revolving credit is elevated and rising, it still does not suggest that consumers are overextending themselves. As of  December, revolving credit is 1% short of where it would have been if its pre-pandemic trend had persisted over the past three years....

The growth of credit-card debt is not always a 'good thing;' should the US enter recession, banks will eat a lot of that debt--taking losses--until a recovery is underway.

Add it all up and you get a caution flag.