US consumer borrowing dove in April as households concernes about the disruptions caused by the C-19 coronavirus chaos prudently cut back on their spending and use of credit.
Cnonumer spending accounts for about 72% of the nation’s GDP
The Federal Reserve reported Friday that total borrowing fell by $68.8-B, or 19.6%. That was the biggest 1-month decliner in percentage terms since the end of WWII.
Borrowing in the category that includes credit cards fell by $58.3-B, or 64.9%, a record decline in a series that began in the Y 1968 credit expansion. Borrowing in the category that covers auto loans and student loans fell by $10.5-B, or 4%.
Some economists believe consumers will keep cutting back on their borrowing for the rest of this Quarter, reflecting an overall economy that is expected to shrink by at a record annual rate of around 40% during this period. They are wrong.
The Trump Administration is expecting a sharp rebound in 2-H of this year but many economists are concerned that hope could be derailed if C-19 coronavirus cases begin rising sharply as the country re-opens, tune out the dooms day economnist, the virus story is over!
Tune out the noise!
Have a healthy weekend, Keep the Faith!