Consumer Loan Delinquencies Grow During Second Quarter
High unemployment rates and debt continue to burden Americans, as evidenced by a new report. U.S. loan delinquencies increased across eight sectors from 2.8 during the first quarter of 2010 to 3 percent during the second quarter, according to the American Bankers Association. The increase came about even as the credit card delinquency rate fell to its lowest level since 2001.
Mobile homes and marine loan delinquencies contributed significantly to the increase. Mobile home delinquencies rose from 3.65 to 4.01 percent, while marine loan delinquencies increased from 1.93 to 2.2 percent during the second quarter.
"The economic momentum over the last few quarters seems to be losing steam," ABA chief economist James Chessen said. "This will affect job creation and the ability of consumers to pay off debt. I think delinquencies will continue to improve but at a slower pace, reflecting a struggling economy."
The rise in delinquency rates may also discourage Americans from spending, inhibiting economic growth and job creation. Although more consumers are engaging in debt relief programs to improve their finances, the high unemployment rate continues to keep millions of Americans financially overwhelmed.