Data through January 2014, released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed decline in national default rates during the month. The national composite posted 1.34 percent in January, a marginal decline from 1.35 percent in December. The first mortgage default rate was 1.26 percent in January, slightly down from 1.27 percent last month. The second mortgage posted 0.72 percent in January, down from 0.76 percent in December. The auto loan default rate was 1.11 percent in January, down from 1.12 percent in the previous month. The bank card rate rose to 2.99 percent, slightly higher than its historical low of 2.97 percent set in October 2013.
“The severe weather conditions afflicting the country impacted economic activity” said David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. Retail sales were down and the labor market conditions were mixed in January data. Overall economic activity is still subpar. Against this background, consumer default rates have stabilized at levels similar to those seen before the financial crisis. “All the month to month changes were small. Two out of the five cities saw default rate decreases. Chicago’s rate increased the most; it posted 1.75 percent, 13 basis points higher than last month’s level. New York also saw its default rate increase; it posted 1.49 percent, 11 basis points higher than December’s level. Los Angeles posted 1.07 percent, the same as last month and its lowest default rate since July 2006. Miami maintained the highest default rate and Los Angeles had the lowest. All cities – Chicago, Dallas, Los Angeles, Miami and New York remain below default rates posted a year ago, in January 2013.”