Consumer balance sheets are still relatively healthy, today, thanks in large part to the rounds of stimulus during the pandemic. Those savings have been spent and credit card usage has risen an astonishing 13% quarter-over-quarter.
This indicates that with high gas and food prices, consumers are turning to their credit cards to make ends meet. This deterioration in consumer balance sheets will continue as long as inflation outpaces wages.
- Delinquencies are beginning to pick up as consumers feel the strain. According to Cox Automotive, auto delinquencies were up 30% year-over-year in May. Subprime auto loans more than 60 days past due are at 5.36% of total subprime loans, higher than their pre-pandemic levels.
continue reading »