US Consumer Debt Woes Continue to Mount

US banks including Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup have reported that consumers are starting to fall behind on their credit card and loan payments as the economy softens, although delinquency levels are still modest. The banks have set aside billions of dollars to cover potential soured loans. While delinquencies and net charge-offs have slowly risen as expected, consumers and businesses generally remain strong, according to industry chiefs. However, worsening economic conditions could lead to credit deterioration throughout 2023 and 2024 with losses eventually surpassing pre-pandemic levels given an oncoming recession.