WASHINGTON - 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 yesterday 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.
Households have been spending less and saving more as they seek to replenish nest eggs in the face of massive job layoffs.
Consumer spending, which accounts for about 70 percent of total economic activity, fell 0.2 percent in March, ending an otherwise strong quarter.