Tuesday, 01 August 2017 00:00

The US Economy is Flashing a Major Warning Sign

Written by
Rate this item
(0 votes)

(New York)

Investors beware, the US economy is flashing a warning sign that could mean we are headed for a downturn. Credit card companies are starting to grow nervous as the net charge-off rate, or the percentage of loans that credit card issuers write off as a loss, has just hit its highest level in four years, a continuation of several quarters of the rate rising. The trend hit all major card issuers and is starting to eat into bank earnings. The current rate is 3.29%, but it is still a long way from the peak hit in 2010—10%. The rate had dropped for 24 straight quarters during the recovery, until a reversal in recent quarters.

FINSUM: Higher default rates are likely a sign that consumer spending is headed for a weaker period. Many sectors could be hit by this and it could be the canary in the coal mine of a possible recession.

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…