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U.S. Consumer Borrowing Falls Most Since 2010 Amid Coronavirus

U.S. consumer borrowing unexpectedly slumped in March by the most in more than a decade.

U.S. Consumer Borrowing Falls Most Since 2010 Amid Coronavirus
A pedestrian walks down a street in New Jersey, U.S. (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) -- U.S. consumer borrowing unexpectedly slumped in March by the most in more than a decade, reflecting a record downturn in credit-card debt outstanding as the coronavirus caused shopping to grind to a halt.

The $12 billion decrease in total credit from the prior month followed a revised $19.9 billion February gain, Federal Reserve figures showed on Thursday. The median estimate in a Bloomberg survey of economists called for a March increase of $15 billion.

U.S. Consumer Borrowing Falls Most Since 2010 Amid Coronavirus

Revolving, or credit-card, debt plummeted $28.2 billion, the most in records back to February 1968, or at a 31% annualized rate -- the fastest in 31 years. Non-revolving debt, which includes auto and school loans, rose by $16.1 billion.

The coronavirus pandemic that’s closed businesses and forced millions out of work is creating financial hardships for many Americans. Faced with questionable incomes, notwithstanding government financial-relief efforts, consumers are likely to cut back on purchases and borrow less.

©2020 Bloomberg L.P.