Experian: Credit Default Rates Unchanged

Consumer credit default rates held steady in February, reported Experian, New York.

S&P Dow Jones Indices and Experian said their Consumer Credit Default Indices reported a composite rate of 0.97 percent in February, within one basis point of the rate in the previous two months. The first mortgage default rate was unchanged at 0.84 percent.The bank card default rate increased by four basis points to 2.56 percent. Auto loan defaults reported in at 1.05 percent, up one basis point from January.

Three of the five major cities saw their default rates decrease during February. Miami reported a default rate of 1.07 percent, down 10 basis points from January. Dallas reported 1.03 percent, an eight basis point decrease. New York recorded 0.97 percent, down seven basis points. Chicago was unchanged for February, at 1.02 percent. Los Angeles was the only city to report a default rate increase, 0.76 percent, up four basis points.

“Low and stable consumer credit default rates confirm the positive picture of the consumer economy seen in recent data on personal income and consumption,” said David Blitzer, managing director and chairman of the Index Committee with S&P Dow Jones Indices. “Recent gains in the labor market–a large jump in job growth in February, an unemployment rate at 4.9 percent and the low level of weekly initial unemployment claims–all contribute to good consumer credit conditions.”

Blitzer noted while inflation is largely absent from current economic reports, the same strong job growth boosting consumer spending may be setting the stage for future price increases or further action from the Fed to raise the interest rate. “For now, low default rates and a strong consumer economy are in place,” he said.