Credit card use dropped alongside coronavirus shutdowns, job loss in March
Revolving credit decreased at a 30.9 percent annual rate in March
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Americans stopped using their credit cards in March just as the coronavirus was hitting the U.S. economy, a new report found.
On Thursday, the Federal Reserve released consumer credit data that showed revolving credit, like credit cards, fell at a 30.9 percent annual rate in March, which is the “biggest percentage decline since January 1989,” according to MarketWatch.
The financial website reported that revolving credit fell $28.2 billion in March.
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Meanwhile, non-revolving credit rose by 6.2 percent, or $16.1 billion. Non-revolving credit includes auto and student loans, but doesn’t include mortgage loans, MarketWatch reported.
Overall, total consumer credit fell at a 3.4 percent annual rate in March.
That’s a drop of $12 billion, and is the first drop in consumer spending since August 2011, according to MarketWatch.
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The financial website said Americans avoided using their credit cards in March because of “weaker personal income growth and rapid job losses” caused by the economy shutting down to slow the spread of the coronavirus.
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On Thursday, the Labor Department reported that almost 3.17 million Americans filed for unemployment last week, which is the lowest amount of jobless claims since the week ending on March 15.
Later on Thursday, Labor Secretary Eugene Scalia predicted that jobs will return quickly once states ease their stay-at-home measures.
"We lost a lot of jobs all at once," he told FOX Business. "But we'll be gaining a lot of jobs all at once, too, as large companies reopen."