The average likelihood that consumers would miss a minimum debt payment in the next three months rose to 13.3%, the highest level since April 2020, particularly impacting those earning under $50,000 and with lower education levels.
Perceptions of credit access compared to a year ago deteriorated, household spending growth expectations dropped to a historic low of more than three years, and workers' optimism about the labor market varied, reflecting a weakening economy.
Hiring slowdown in July, unexpected rise in unemployment rate to 4.3% indicated deteriorating labor market conditions. Increased delinquencies in auto loan balances and credit card debts emphasize financial strain on consumers.
Fed focuses on employment with cooling inflation and softening labor market. Benchmark rates may be cut starting September if inflation continues to lessen, highlighting policymakers' response to economic indicators.
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