One of the hallmarks of a recession is a rise in consumer credit defaults, inevitably resulting in a rise in 3rd-party collection activity. That has not happened yet – in fact, quite the opposite. 3rd-party collection activity is at a record low of 5.7% of consumers – well less than half the 14.6% level seen in 2008’s recession. Despite record high credit card balances being carried by consumers, the rate of default is surprisingly low. Looks like consumers are opening their eyes. (Chart from Wolfstreet.com)
Jeffrey Cerny