What Is Causing the Spike in Consumer Delinquency Rates?

For the first time since the COVID-19 pandemic, consumer delinquency rates are at an alarmingly high rate. Delinquent payments, defined as payments not made within 30 to 59 days, were at 1.13% in September, a 0.13% jump from August. 

Key Takeaways

• Financial health in America is indicated by delinquency rates, according to Investopedia. The increase in past due loans signals that inflation and other economic stressors have rendered consumers scrambling to budget their money.

• The increase in delinquency rates began in 2022, when federal stimulus checks were no longer being disbursed and inflation started to rise.

• A deteriorating job market and high interest rates made borrowing costs higher, especially alongside the Fed rate cut in September. 
  

  To learn more about the rise in consumer delinquency, read this Investopedia article and the Great Point Capital October Markets newsletter found on our website.

Source: Investopedia