Consumer Credit Defaults Are Falling, But Don’t Celebrate Yet
Waiting for some good news? Here’s half an attempt.
The S&P Dow Jones and Experian Consumer Credit Default Indices, which measures consumer default rates fell to 0.81 percent in May, down five basis points from April. The index measures comprehensive changes in consumer default rates — broken down into mortgage, auto loans and bank cards.
Among the cities that contributed the most, New York led with a 12 basis points drop to a default rate of 0.89 percent, followed by Dallas where rates fell by seven basis points to 0.69 percent. Chicago’s default rate fell by five basis points to 0.98 percent and Los Angeles came in fourth recording a default rate of 0.67 percent, down four basis points. Conversely, Miami’s default rates edged up higher ( six basis points) for the third consecutive month at 1.27 percent.
“Overall the consumers’ credit picture is very good,” says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Consumer credit default rates continue at the lowest levels in more than 10 years and well below those seen before the financial crisis.”
Is this silence before a storm?Last modified: June 21, 2016
Srividya's work has appeared in publications like Money magazine, Advertising Age, FirstPost and The Economic Times. She has also dabbled in business intelligence solutions, and holds a Masters degree in Business and Economic Reporting from NYU.