Authored by Mike Shedlock via MishTalk.com,
Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.
Please consider the New York Fed Household Credit Report for the Fourth Quarter 2023, released this week.
Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.
For nearly all age groups, serious delinquencies are the highest since 2011 at best.
Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.
Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.
Unlike the Great Recession, mortgages are not a serious issue.
Everyone who could refinance did refinance and often at rates near 3.0 percent. After refinancing, monthly payments dropped. Finally, rising prices put risk of foreclosure very low for all but recent buyers who stretched too far to buy a house.
Yet, here again we see a small uptick across the board but especially noticeable for age group 18-29. But this will not be a replay of the Great Recession mortgage bust.
Economists are and writers are still struggling with what seems obvious if one bothers looking beyond the headline numbers.
For example on February 7, the Wall Street Journal posted Why Americans Are So Down on a Strong Economy
Payrolls are up by 5.77 million since May of 2022, but full time employment up only 457 thousand.
Nonfarm payrolls and employment levels from the BLS, chart by Mish.
No amount of BLS smoothing can hide this.
For discussion, please see Jobs Soar but Full Time Employment Is Barely Changed Since May 2022
Jobs increased but employment is stagnant. People are taking on multiple jobs or coming out of retirement to take part time jobs because they are struggling to make ends meet.
Writers and analysts cannot see the picture, especially left wing rags listening to Biden about how lovely this economy is. Polls show the real score. So do the above charts.
I now expect a sudden stop that is going to hit the Fed in the face like a ton of bricks. But which way?
I am open to the idea of a deflationary bust or a stagflation mess. The former will have the Fed cutting rates, the latter would be an extreme world of hurt with the Fed’s hands tied, unable to cut.
Either way it’s going to be a serious problem. It will be another economic payback for general Fed incompetence for time and time again holding rates too low, too long.
Soft landing? Forget about it.