Ten years into a bull market, Americans are getting jittery about when the music will stop and the next recession will tear through the economy.
While bad economic omens are being spotted in a variety of places, last month it was a spike in auto delinquencies that spooked market participants, according to Business Insider.
The Federal Reserve reported the number of borrowers with auto loans more than 90-days delinquent shot up by 1.5 million in the fourth quarter, reaching a total of 7 million — the highest mark ever in absolute numbers, though not as a percentage of the auto-loan market, which has ballooned over the past seven years.
The surge in auto defaults has been a source of both confusion and consternation. The Fed called the development surprising, and Goldman Sachs analysts referred to it as “something of a puzzle,” given the broader economic and labor-market strength, and the lack of distress in other consumer credit products, such as mortgages and credit cards.
Part of the mystery surrounding the auto-loan-default spike is the timing.
The unemployment rate is still hovering near all-time lows, foreclosures and personal bankruptcies are at post-crisis lows, and wages have been growing.
