Consumer Credit Skyrockets in March
The tough outlook for the economy has made many consumers feel the ill effects and caused them to make many changes in their day-to-day life. But according to new figures made available, via Bloomberg.com, many aren’t quite ready to give up the affluent lifestyles to which they have grown accustomed.
According to these statistics, U.S. consumer borrowing more than doubled what was forecast for the month of March. Instead of the $6 billion that economists predicted for the month, consumer credit leapt to $15.3 billion. Compare that to February, in which credit rose by $6.5 billion, and you’ll note the severity of the swerve upward. It marks the last month in a quarter that saw consumer credit as a whole rise by $34 billion, the most since the first quarter of 2001, which was not coincidentally the last recession into which the U.S. entered.
Experts point to new, tightened lending standards for home-equity loans as one culprit—in addition to the general recession—that is causing consumers to turn to credit in credit cards and the like. With home prices dropping and potential to drop many more percentage points in the upcoming months, perhaps this latest shock will force economists to adjust their predictions in the second quarter and beyond.
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