A couple months back we heard that Credit Card Debt was at all time highs.
In the last month both Discover Card and Capital One reported that their default rate jumped from 3% or less to 5.7-5.9% respectively. Similar to what happened in 2008.
Now, we are starting to see an increase in mortgage defaults from first time home buyers and FHA loans.
So, these are all signs that people are getting overextended.
The people that are stretched thin are to the point that they can not pay their bills.
The next thing will be people stop going out to eat. That they start separating WANTS from NEEDS. Our GDP is roughly 63% based on Consumer Spending. When the consumer stops spending on things they can’t really afford then we will be in a recession.
I see some cooling down in restaurants but not a lot? It seems spotty, some places are still attended but not crowded. Others are just mostly empty. Fast food has to eventually suffer, it is over priced. 15 or 16 bucks for McDonalds? 20 bucks for two sandwiches at chick fil a? 17 bucks for a snack at taco bell? 13 bucks for three chicken strips, a drink, a side and a biscuit at Popeye’s? Can’t see it6+-
“In the last month both Discover Card and Capital One reported that their default rate jumped from 3% or less to 5.7-5.9% respectively”
CC companies report delinquency and charge-off rates.
I would advise young people NOT to get trained as chefs. The combination of inflation and inability to hire staff will kill the industry.