High rates and rising costs are putting a lot of pressure on the consumer
While the consumer remains resilient for now, at this rate, there is not a lot of runway left
We’ll be booking profits and rotating capital when the bullish market structure changes pic.twitter.com/PaczI3Y6S7
— Game of Trades (@GameofTrades_) July 3, 2024
- Broad Increase in Credit Card Delinquency:
- Percentage of People in Delinquency: The percentage of people with delinquent credit card debt has risen consistently over the last eight to 11 quarters. This trend is widespread across different demographics.
- Poorest ZIP Codes: In the poorest ZIP codes, delinquency rates increased from 11% in Q2 2021 to 17.4% in Q1 2024—a relative increase of 58%.
- U.S. Overall: The U.S. as a whole experienced a similar upward trend, reaching 94.8% of its peak delinquency rate for the period examined.
- Credit Card Debt in Delinquency:
- The percentage of U.S. credit card debt in delinquency has also risen.
- The richest 10% of ZIP codes saw their delinquency rate climb from 4.8% in Q2 2022 to 7.4% in Q1 2024—a relative increase of 54%.
- Total Consumer Debt and Interest Rates:
- Total consumer debt reached $17.5 trillion, contributing to the credit card delinquency surge.
- Interest rates on credit cards have risen, exacerbating the situation.
- The 18 to 29-year-old age group now faces higher default rates than during the peak of the pandemic.
Delinquencies on credit cards have reached the highest levels in a dozen years, auto loan delinquencies are on the rise. pic.twitter.com/lk9yqTOf7w
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) July 4, 2024
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