Consumer credit falls at fastest pace in 18 years

[metalman]

Consumer credit falls at fastest pace in 18 years

Consumer borrowing falls in March at fastest pace in over 18 years, Americans saving more

WASHINGTON (AP) -- Consumer borrowing plunged in March at the fastest pace in 18 years as Americans put away their credit cards and hoarded cash amid the worst recession in decades.

The Federal Reserve said Thursday that consumer borrowing dropped 5.2 percent in March, the biggest decline since an 8.1 percent fall in December 1990.

In dollar terms, consumer borrowing plunged by $11.1 billion. That's the largest dollar amount on records dating to 1943, and more than three times the $3.5 billion drop that economists expected.

The borrowing category that includes credit cards dropped 6.8 percent in March after a 12.1 percent plunge in February. The category that includes auto loans fell 4.2 percent after rising by 1.2 percent in February.

The Commerce Department last week said that the personal savings rate edged up to 4.2 percent in March, marking the first time in a decade that the savings rate has been above 4 percent for three straight months.

[ax]

Re: Consumer credit falls at fastest pace in 18 years

Combine this with the expected default rates on credit card loans by the stress tests and is there any question that the consumer is dead? And yet retailers whose sales are down 32% YOY have doubled in the last 6 weeks. Yep, that makes sense.