(TheLastPatriotNews.com) – In disheartening testimony to the miserable failure of Bidenomics and its toll on an increasingly economically embattled nation, Federal Reserve data now shows that an increasing number of Americans are failing to make debt payments and might see themselves forced to declare bankruptcy.
This trend is particularly evident in all forms of debt except for student loans, according to a recent report from the Federal Reserve Bank of New York, cited by The Daily Caller.
The report stresses that the rise in delinquencies is attributed to the deteriorating economic conditions in the United States, driven by inflation and rising interest rates.
“Consumers pay for things three ways: income, savings, and credit. We know that wages have not kept up with inflation over the last 2.5 years and that many households have spent all of the savings accumulated during the pandemic,” commented Michael Faulkender, chief economist and senior advisor for the Center for American Prosperity.
“Therefore, in order to maintain their spending levels, they have been adding to their credit card balances, such that aggregate balances have now eclipsed $1 trillion. Rising credit card debt in a rising interest rate environment with incomes not keeping pace will put more and more households into financial difficulty, resulting in delinquencies,” the expert elaborated.
The report notes that credit card and auto loan delinquencies experienced the most significant increases, with credit card debt rising to $1.08 trillion in the third quarter of 2023, a 4.7% increase from the previous quarter.
Real wages in the US have decreased since President Joe Biden’s administration began, with a 2.1% decline reported from early 2021 to late 2023.
Concurrently, Americans’ savings have diminished significantly, dropping from nearly $6 trillion in April 2020 to $687.7 billion in September 2023.
“It likely indicates that average Americans are not doing well financially. The quarter-by-quarter increase in delinquencies is probably a signal that the economy is not as good as people thought earlier this year — rather than the hard landing many predicted last year but never came may simply have been delayed,” explained Jai Kedia, a research fellow at the Cato Institute.
Inflation reached a peak of 9.1% in June 2022. It remains above the Fed’s 2% target. The Fed responded by raising the federal funds rate to its highest level in 22 years.
“Over the past three-and-a-half years, we’ve had widespread unemployment, an uneven recovery, and then both the highest inflation and the most aggressive rate-hiking campaign in four decades,” said Peter Earle, an economist at the American Institute for Economic Research.
“Inflation is still substantially elevated. Unemployment is rising faster now, the economy is slowing under the strain of higher borrowing costs, and bills are going unpaid,” Earle concluded.