NEW YORK—A new report shows that consumer defaults rose slightly in November over the previous month.
The latest S&P/Experian Consumer Credit Default Indices shows the composite rate at 0.97% in November, up three basis points from October.
The auto loan default rate was 1.04%, up four basis points for November. The first mortgage default reported in at 0.82%, up one basis point from the previous month. The bank card default rate increased 16 basis points from the previous month, recording a 2.91% for the month of November.
Three of the five major cities saw their default rates increase during the month of November. Miami reported a 1.48% default rate, up 19 basis points from October. Dallas reported an 0.88% default rate in November, up 13 basis points. Los Angeles recorded a 0.74% default rate, up two basis points from October. New York reported a 0.95% default rate for November, the same rate as the previous month. Chicago was the only city to report a decrease in the default rate this month at 1.03%, down four basis points from the prior month, Experian stated.
“November was the second consecutive month when default rates rose across all types of consumer credit,” says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “While two months isn’t long enough to establish a turning point or a new trend, the consumers’ financial condition should be watched going forward. Consumer spending has been a key source of growth for the economy. However, other factors do not suggest any cause for concern over consumer credit defaults: inflation remains low and expectations of future inflation are low and stable, the labor market continues to improve, and wages – long dormant – may be turning upward. Continued weakness in oil prices are adding to disposable income. Finally, the recent increases are small compared to past moves and are well within a range of random monthly shifts.”