The Wall Street Journal has a story today about consumers becoming delinquent in paying their bills. The story isn't wrong: both credit card and auto loan payments have transitioned into delinquency (30 days late) at increasing rates over the past couple of years.
The data comes from a quarterly Fed report, and the problem is that it's very hard to conclude anything from it these days. If everything were headed in the same direction, it would be easy. But it's not. For example:
If you look at severely delinquent loans, there's nothing much going on with autos and only a moderate problem with credit cards. But there's more:
The actual overdue balance on all consumer loans has been steadily down, with only the tiniest of upticks in the past year. And there's this:
Loans in collection have trended down for years and show no problems at all.
The Fed's credit report has been like this for a while: depending on what you look at things can seem good or bad. You might think of the credit card data as a canary in the coal mine—it starts to go bad first and signals trouble ahead—or it might be that it's just the most volatile signal and should be discounted unless it's been bad for a while.
I don't know. Overall, credit trouble does seem to be increasing over the past year, but only slightly. It could be a sign of trouble ahead; a reversion to the mean after pandemic rescue funds dried up; or just a slight wobble ahead of a soft landing. Take your pick.