The latest report from the Federal Reserve shows that consumers added $6.1 billion in credit card debt for December 2010. Filtering out seasonal bursts like the bump in holiday spending, the Fed's report shows that the December totals were not the result of a holiday shopping binge, and can be considered the first jump in credit card debt since 2008. Even more heartening to those holding their breath: the total far outstripped the $2.5 billion in credit card debts that analysts separately polled by The Wall Street Journal and Business Week had expected. As a final cause for bullish outlook, December 2010 marks the third month in a row that Americans eased back into putting purchases on their credit cards. Non-revolving credit, which includes debt for homes, student loans, and cars also rose, jumping 2.8 percent compared with last year.


Considering the wonky wackiness of last week's jobs report, not everyone is convinced this means we're out of the woods. Analysts are continuing to pour over the report, but a sampling of initial reactions is below:

  • This Is Going to Last  The Wall Street Journal's  Jeff Bater sees a recovery in the making. Not only does the relatively relaxed savings rate show that consumers are becoming a little less obsessed with saving their cash, Bater says there's another reason to expect the buying trend to continue: the extension of federal income tax cuts, which he says "is letting consumers keep more of their paychecks, which should help support spending going forward."

  • We Need This  The Wall Street Journal's Bater says we needs the boost because "consumer spending is a big part of the economy. Rising spending at the end of 2010 made the economy grow faster."
  • But Perhaps We've Stopped Being Spendthrifts  This is what Ellen Zentner, senior U.S. macro economist at the Bank of Tokyo-Mitsubishi, told MarketWatch, "We don’t think households have changed their mind about how much debt they are willing to carry, but we do believe that they are getting more comfortable using credit cards, which is a good sign for the overall economy."
  • It's the End of the Beginning  Calling the Fed's latest report both bullish and bearish, Business Insider's Cullen Roche is worried that the uptick could be a signal that Americans didn't learn their lesson and have gotten a little too comfortable. Rather than sticking with spendthrift ways and eliminating an oftentimes crushing credit card debt, Roche worries that consumers are feeling a little too good about all the fat they've trimmed when they still have a ways to go. "The US consumer is still sitting on a lopsided balance sheet and needs to de-leverage," he says.
  • Redo the Math  The Associated Press' Martin Crutsinger acknowledges that the December numbers show a pretty significant jump-- consumers took on an additional $6.1 billion in debt--but let's get real: "Even with the December gains, consumer borrowing is just 0.7 per cent higher than the more than three-year low hit in September. It is 6.6 per cent below the high set in July 2008."