by Avi Gilburt
GoldSeek
The New York Fed recently released its household debt report for the first quarter. The chart below shows percentages of delinquent loans.
As you can see, the situation in consumer debt has deteriorated further. In 1Q, more than 7% of credit card loans turned into serious delinquency, and the delinquency ratio is now less than one percentage point below their GFC peak. As the chart illustrates, delinquencies have risen sharply since 1Q23. If you showed this trend to a banking analyst who had lived on a deserted island for the past two years, they would likely conclude the U.S. economy is in a severe recession. Yet, current conditions remain relatively benign for consumers and the broader economy. Predicting the impact of a job market slowdown would not be difficult.