Rising Consumer Delinquencies Spark Heightened Economic Concerns

Recently published consumer delinquency rates by the Federal Reserve deliver some indicators that potentially signal more significant economic issues down the road. During the 1st quarter of 2024, aggregate delinquency rates increased, “with 3.2% of outstanding debt in some stage of delinquency as of the end of March,” marking a notable rise in financial distress among consumers. The Fed’s data further “indicates that transition rates into delinquency have surged across all debt categories.” Credit card balances and auto loans have become delinquent annually by 8.9% and 7.9% respectively, but mortgage delinquencies remain low by historical standards despite increasing by 0.3 percentage points. The Fed suggests that there could be several factors at play which are causing the rise in delinquencies; however, “consumer delinquencies are among the most worrisome economic indicators” among those that the Fed is currently monitoring, “necessitating a cautious and proactive approach to prevent further deterioration.”

Source:    https://finance.yahoo.com/news/fed-warns-against-rising-delinquency-203014867.html