Give Them Some Credit

Yes, consumer credit card delinquencies rose during Q1 back up to 2012 levels. But no, that doesn’t indicate the burgeoning stress in the credit system that recession proponents have been waiting (and hoping) for. Consumer borrowing is simply normalizing to historical trends. That’s Eric’s conclusion after a deep dive into consumer credit data. Delinquencies occur mainly among maxed-out consumers, he notes, and their ranks are consistent with pre-pandemic levels. Moreover, most consumers have the income support they need to handle their credit card debt despite “higher-for-longer” interest rates. We see no consumer spending retrenchment ahead, and apparently neither do banks or investors in S&P 500 Consumer Finance stocks.