Most key indicators suggest good news for the postpandemic U.S. economy. GDP growth has been robust. So, too, has consumption growth. And unemployment rates remain near historic lows. But rising consumer delinquencies indicate that an increasing number of households are unable to meet their financial obligations. If policymakers and lenders can understand why credit card delinquencies are on the rise, they will be in a better position to identify possible underlying weaknesses that aggregate statistics such as GDP and employment might miss. They will also be in a better position to address potential vulnerabilities in household balance sheets. This article evaluates one explanation for the rise in credit card delinquencies: pandemic-induced changes in borrower credit scores.
This article appeared in the Second Quarter 2025 issue of Economic Insights. Download and read the full issue.
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