US Consumer Spending Could Hit a Roadblock Per This Data

Proceed With Caution

The U.S. economy has proven incredibly resilient in the face of rising costs and elevated interest rates. The key driver keeping the economy on track: You, the American consumer. But some data show that cracks may start to emerge.

Delinquency rates on credit cards and auto loans have risen to their highest level in more than a decade, according to the Federal Reserve Bank of New York .

Diverging Data

Annualized, 8.5% of credit card balances and 7.7% of auto loan balances went delinquent in the fourth quarter of 2023, as higher borrowing costs weighed on consumers.

While these figures suggest increasing financial stress for American consumers, other data paint a rosier picture. In January, the U.S. added nearly twice as many jobs as expected. Wages are also on the rise, while the unemployment rate remains near record lows.

Zooming Out

Despite the increase in select delinquencies, the story looked differently for other loan types , including student loans and mortgages, where delinquencies remained below pre-pandemic levels. This contributed to the overall delinquency rate remaining well below pre-pandemic levels as well at 3.1%.

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