Consumer borrowing drops in March

U.S. consumer borrowing dropped sharply in March, according to Federal Reserve data released Thursday. Total consumer credit was down at a 3.4% annual rate in March, down from a 5.7% growth rate in February.

Revolving credit, like credit cards, fell at a 30.9% annual rate in March. Nonrevolving credit, typically auto and student loans, rose 6%. The data does not include mortgage loans.

Weaker income growth and rapid job loss kept consumers from using credit in March. Total retail sales fell a record 8.7% in March as the economy was shut down to stop the spread of coronavirus. A Fed survey of senior loan officers reported tightening lending standards and weakening demand for credit cards and auto loans. How consumers react as states start to reopen will be key to how the economy recovers.