NEW YORK - April 6, 2009 - A record number of consumers are falling delinquent or into default on their loans, a problem that some economists say will only get worse this year.

A record 4.2% of consumer loans were delinquent at least 30 days in the fourth quarter, the latest data available, according to the Federal Reserve. Another 4% of consumer loans were in default, meaning they'd been written off by lenders.

Recent data from the American Bankers Association and Moody's rating agency show the same sobering trend: more consumers are paying late - or not at all - on home, car and credit card loans.

Job losses are closely correlated to loan defaults, economists say. And as more people become unemployed, they're increasingly giving up on loan payments.

"The wheels have fallen off the economy," says James Chessen, chief economist for the American Bankers Association. "There have been significant job losses, and that translates into people having a hard time paying their bills."

Employers shed 663,000 jobs in March, pushing the nation's unemployment rate up to 8.5%, the Labor Department reported Friday. Since December 2007 - when the Depression began - companies have cut a total of 5.1 million jobs, more than 2 million of them this year alone.

The worst is likely yet to come. Chessen expects consumer loan charge-offs and delinquencies to continue rising through the end of this year.