Credit card defaults at record levels, pandemic windfalls spent

Credit card defaults from small lenders have hit record levels, surpassing the Dot Com bubble & Financial Crisis peaks.

Add to that that American excess savings reached $2.1 trillion in 2021, but they ran dry months ago. The pandemic savings cushions that helped Americans weather high prices in recent years have worn through, contributing to a loss of consumer firepower that’s rippling through the economy.

Delinquencies are rising. Executives are flagging caution among shoppers in recent earnings calls, and retail sales barely increased in May after falling the month prior. Economists forecast solid inflation-adjusted consumer spending in data out Friday, helped by lower gasoline prices, but that would follow an outright decline in April.

Worried, anyone?

#creditcard #defaults #money #people #toughtime #finance

Sources: Game of Trades, Bloomberg, Lisa Abramowitz