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Starting 3/26/2003 find out about business issues, the economy & more!

3/26/03 - Credit Card Delinquencies Reach New High 

WASHINGTON (Reuters) - Mounting U.S. job losses pushed up credit card delinquencies in the fourth quarter of 2002 to the highest level since the American Bankers Association began tracking the data in 1990, the group said on Wednesday.

Credit card delinquencies climbed to 4.07 percent of all accounts in the quarter, up from 4 percent in the third quarter of 2002, which was the previous high, the American Bankers Association said in a statement.

Rising consumer debt delinquencies add to signs that the U.S. economic recession of 2001 and its uncertain recovery have strained the finances of many Americans.

Bankruptcies were at a record level last year. Mortgages in foreclosure also reached a record high in the last quarter of 2002, although mortgage bankers say the data shows the number of people unable to meet home loan payments may have peaked.

The increase in credit card delinquencies is linked to a lack of new jobs in the U.S. economy, the ABA's Chessen said.

Another item that shows a slowing economy.  New-home sales plummeted 8.1 percent to a seasonally adjusted annual rate of 854,000, the lowest level since August 2000. That came on top of an even steeper, 12.6 percent decline in January.  Homebuilding, which has been one of the stellar performers in the last few years due to lowering interest rates, is starting to get pinched.  It is important to recognize that the new home market is still a $1.6 trillion market, considered one of the strongest in history.  The key element though, is to understand market direction and whether or not this trend continues.  Lower interest rates have stimulated new home sales and has pumped $$$ into the economy because many people refinanced loans at lower interest rates, thereby lowering their monthly interest payments and freeing up capital to spend in the economy.  Existing home sales declined 4% + in February.  Perhaps it was the weather...Lets just watch this statistic. 

4/05/03