S&P: January Consumer Credit Default Rates Hold Steady

Sorohan, Mike msorohan@mba.org

February 17, 2016


Standard & Poor's, New York, said consumer credit default rates showed little change in January.

The S&P/Experian Consumer Credit Default Indices reported the composite rate at 0.96 percent in January, down one basis point from December. The bank card default rate increased three basis points in January, recording a default rate of 2.52 percent. The first mortgage and auto loan default rates were unchanged for January, reporting default rates of 0.84 percent and 1.04 percent, respectively.

Three of the five major cities saw default rates increase during January. Los Angeles reported a default rate of 0.72 percent, up seven basis points from December. Chicago's default rate increased two basis points from December, at 1.02 percent. Dallas reported a default rate of 1.11 percent in January, up one basis point. New York recorded a default rate of 1.04 percent for the second consecutive month. Miami reported a default rate decrease of 27 basis points in January at 1.17 percent.

"The economy is taking on something of a split personality," said David Blitzer, managing director and chairman of the Index Committee with S&P Dow Jones Indices. "The financial markets are suffering falling prices and a lot of volatility so far in 2016. The stock market is down about 1 percent, interest rates remain extremely low despite the Fed's action in December and concerns about corporate earnings and credit are widespread."

At the same time, Blitzer said, home prices continue to climb, new home building is rebounding and auto sales have been quite strong. "Consumers do not appear to be overly worried about the stock market; their spending patterns haven't collapsed," he said. "Given further modest job growth and continued low inflation, there is no basis for near term worries over consumer spending."

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