Disturbing Delinquencies

Despite a roaring labor market, the credit cycle is turning. After peaking at 4.85% in 09Q2, consumer loan delinquency rates steadily declined to 2% and remained there from 15Q1 through 16Q1. Since then, they have steadily risen and are now at 2.2%. The story’s much the same for credit card delinquencies and auto loans. While the rates are still low, what’s worrying is unemployment is low and wages are rising.