Total Consumer Debt Hit $17 Trillion. Credit Card And Auto Loan Delinquency Rates Are Raising. 40% Of People Have Less Than $20,000 In Their 401(K) Plan…

Consumer debt + Corporate debt + Government debt should be around
$80T. Fortunately my debt is settled every 30 days with a net surplus.

— Forgotten man (fed agent) ???? (@LoveHerMo) May 15, 2023

NY FED: CREDIT CARD AND AUTO LOAN DELINQUENCY RATES ROSE IN FIRST QUARTER.

— Breaking Market News (@financialjuice) May 15, 2023

40% of individuals have lower than $20,000 of their 401(k) plan, in response to a survey from Vanguard published in MW.

— unusual_whales (@unusual_whales) May 15, 2023

What we’re witnessing is the top of an almost fifteen 12 months debt binge at 0% rates of interest, which was capped off by the pandemic stimulus consumption. Now, banks are quickly returning to the 2009 origin amid the widespread belief THIS will probably be the simple way out

Total household debt rose by $148 billion, or 0.9 percent, to $17.05 trillion in the primary quarter of 2023. Mortgage balances climbed by $121 billion and stood at $12.04 trillion at the top of March. Auto loan and student loan balances also increased to $1.56 trillion and $1.60 trillion.

HOUSEHOLD DEBT AND CREDIT REPORT (Q1 2023)

www.newyorkfed.org/microeconomics/hhdc.html

Total household debt rose by $148 billion, or 0.9 percent, to $17.05 trillion in the primary quarter of 2023, in response to the newest Quarterly Report on Household Debt and Credit. Mortgage balances climbed by $121 billion and stood at $12.04 trillion at the top of March. Auto loan and student loan balances also increased to $1.56 trillion and $1.60 trillion, respectively, but bank card balances were flat at $986 billion.

Mortgage balances rose modestly by $121 billion in the primary quarter of 2023 and stood at $12.04 trillion at the top of March. Bank card balances were flat in the primary quarter, at $986 billion. Auto loan balances increased by $10 billion in the primary quarter, bucking the standard trend of balance declines in first quarters. Student loan balances barely increased and now stand at $1.60 trillion. Other balances, which include retail cards and other consumer loans, increased by $5 billion. In total, non-housing balances grew by $24 billion.

Mortgage originations, which include refinances, dropped sharply in the primary quarter of 2023 to $324 billion, the bottom level seen since 2014. The quantity of newly originated auto loans was $162 billion, a discount from pandemic-era highs but still elevated in comparison with pre-Covid volumes. Aggregate limits on bank card accounts increased by $119 billion, representing a 2.7% increase from Q4 2022 levels. Limits on home equity lines of credit were up by $9 billion in the primary quarter.

The share of current debt becoming delinquent increased for many debt types. The delinquency transition rate for bank cards and auto loans increased by 0.6 and 0.2 percentage points, respectively approaching or surpassing their pre-pandemic levels.

The Latest York Fed also issued an accompanying Liberty Street Economics blog post taking a more in-depth have a look at housing equity and mortgage refinancing as tools for funding consumer spending. Fourteen million mortgages were refinanced through the pandemic refinancing boom, during which $430 billion of home equity was extracted through cash-out refinances. About 64% of those mortgages were “rate refinances”, leading to a mean payment reduction of $220 monthly for those borrowers.

“The mortgage refinancing boom is over, but its impact will probably be seen for many years to come back,” said Andrew Haughwout, Director of Household and Public Policy Research on the Latest York Fed. “In consequence of great equity drawdowns, mortgage borrowers reduced their annual payments by tens of billions of dollars, providing additional funding for spending or paydowns in other debt categories.”

The Quarterly Report features a summary of key takeaways and their supporting data points. Overarching trends from the Report’s summary include:

Housing Debt

There was $324 billion in newly originated mortgage debt in Q1 2023. With the pandemic-era refinance boom over and a slowdown in home sales, each refinance and buy mortgage originations declined substantially in the primary quarter.
Latest foreclosures remain low. About 35,000 individuals had recent foreclosure notations on their credit reports, roughly consistent with Q4 2022 levels.

Student Loans

Outstanding student loan debt stood at $1.604 trillion in the primary quarter.
Lower than 1% of aggregate student debt was 90+ days delinquent or in default in Q1 2023, a small decline from the previous quarter. Delinquency rates fell substantially within the previous quarter resulting from the implementation of the Fresh Start program, which made previously defaulted loan balances current.

Total household debt rose by $148 billion, or 0.9 percent, to $17.05 trillion in the primary quarter of 2023.
Mortgage balances climbed by $121 billion and stood at $12.04 trillion at the top of March.
Auto loans to $1.56 trillion.
Student loans to $1.60 trillion.
Credit Card debt $986 billion.

NOTHING TO SEE HERE, MOVE ALONG: Empire Fed Manufacturing Survey Collapsed In April – Biggest Drop Ever (Ex-COVID).

After the stunningly surprising upside surge in April, The Empire Fed Manufacturing Survey has collapsed back to reality in May, crashing 42.6 points to -31.8 from +10.8 (dramatically worse than the -19.0 expected). Outside of the COVID lockdowns, that is the most important MoM drop ever.

Most problematically, Stagflation is screaming loudly again.

www.zerohedge.com/personal-finance/empire-fed-manufacturing-survey-collapsed-april-biggest-drop-ever-ex-covid

indeed it’s: inflation adjusted earnings are down a record 25 consecutive months t.co/vM4CPgmxg6 pic.twitter.com/K4zHgvnjCu

— zerohedge (@zerohedge) May 15, 2023