US Consumer Spending Is Signaling Pain Ahead: Credit Weekly
(Bloomberg) — The US consumer is starting to buckle as rising gas prices crimp spending and the delinquency rate on credit cards reaches the highest level in more than a decade. And that’s before student loan payments restart in October.
A measure of consumer confidence slumped to a four-month low in September as inflation and a deteriorating outlook for the economy weigh on people. That’s a blow given that individual spending fuels about two-thirds of the US economy, and the vast majority of Americans now have less savings than they had before the pandemic after adjusting for inflation.
“Consumer debt quality is declining, signaling potential risks in certain credit market areas,” Moody’s Investors Service said in a report this week. In addition, “many consumer product companies were highly leveraged following a debt splurge in recent years, leaving them vulnerable.”
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