U.S. consumer spending begins to shrink as spending shrinks due to rising gasoline prices and credit card delinquency rates reach their highest level in more than a decade. And when student loan repayment begins in October, consumers’ wallets are likely to be more closed <U.S. credit card delinquency rate trend>
source:FRED
Inflation and worsening economic prospects have raised the consumer confidence index for September It drops to a four-month low. Personal spending is affecting two-thirds of the U.S. economy, but it suggests it could be hit hard given that most Americans save less than they did before the pandemic after inflation
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Source: Meeting Room
“Mell investors Service) is reported this week’s report, “The quality of consumers’ debt” is reduced in particular credit market areas.Many consumers say that many consumers have been vulnerable to the recent years,” said.”The excess savings for 80 percent of the U.S. households)
Source: Bloomberg, Federal Reserve Board
The problem is that companies with a large debt burden can lead to corporate credit problems. Blackstone also said in a recent report, “There will be divisions between companies that can grow fast enough to keep up with borrowing costs and those that do not.”According to Bloomberg’s own analysis, retail companies are at increased risk of their credit ratings being lowered due to sales and profitability pressures
Source: Bloomberg Intelligence
CEO of SPA brand H&M, one of the leading retailers in the retail industry, also explains the current market situation that the business environment of large retailers such as Target Corp. seems to be not good as consumers’ purchasing power decreases. Until now, consumers have been quite flexible, supported by a strong labor market. However, the situation begins to change rapidly as weaknesses appear in young people and low-income households. Moody’s Analytics, which began to show the seriousness of the current situation as the delinquency rate for subprime mortgage loans rose to a record high in July, said, “It is clear that it is a crisis at a time when the delinquency rate is increasing and unemployment is relatively low. The gradual increase in the number of unemployed will put more pressure on that percentage,” he said
Source: S&P GlobalSource: S&P Global