Report
Published August 29, 2023
Commercial Commercial Insights Economic & Market InsightsLenders are tightening underwriting criteria due to high delinquencies among consumers and small businesses amid inflation. People are revising their spending and investment plans. While technology companies thrive, sectors like logistics, Utilities, and Healthcare face challenges. Supply chain issues are easing, but reduced demand affects inventory orders, impacting trucking and logistics with lower tonnage and mileage. Consumers show resilience, bolstered by a strong job market, wage growth, and lower energy and food costs. However, dwindling savings and increased reliance on unsecured debt, along with the resumption of debt obligations like student loans, and ongoing inflation, put pressure on consumers. Recession fears are easing, but concerns for 2024 remain.
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Report
Recessions and Lending
If we go into a recession, what does it mean for lending activity? What does it mean for delinquency? As banks, credit unions and fintechs grapple with these questions, sometimes it helps to look to the past for guidance.
In this latest Macro Moment, take a quick look back at prior recessions and their impact on unemployment, delinquency, and loan growth. Key insights include:
- In the last five downturns, unemployment peaked an average of three quarters after the recession ended.
- In the last four recessions, 30+ DPD delinquency on all loans increased by an average 1.6 percentage points.
- In the prior five recessions, quarterly credit growth slowed from 1.9% in the two years in the lead up to recession to -0.1% in the year following a recession.
Report
Generation Next: Key Generational Insights
Download our report for insights into the major financial milestones your consumers are facing including:
- Gen Z’s journey to independently acquire their first credit products
- Millennials’ quest to become first-time homebuyers
- Baby Boomers and older Gen X reaching retirement
Video
Labor Market Disruption – Why Are Satisfied Workers Leaving?
𝗧𝗵𝗲 𝗹𝗮𝘁𝗲𝘀𝘁 𝗘𝘅𝗽𝗲𝗿𝗶𝗮𝗻 𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗣𝘂𝗹𝘀𝗲 𝗥𝗲𝗽𝗼𝗿𝘁 𝗶𝘀 𝗼𝘂𝘁!
While job satisfaction remains high ⭐, 𝟭 𝗶𝗻 𝟰 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 𝗮𝗿𝗲 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗶𝗻𝗴 𝗮 𝗷𝗼𝗯 𝗰𝗵𝗮𝗻𝗴𝗲 ⚠️.
Also, union membership is at a historic low—𝗷𝘂𝘀𝘁 𝟵.𝟵%—but public support is rising, especially among younger workers. These dynamics are reshaping employer-employee relationships, with big implications for small businesses.
𝗢𝘁𝗵𝗲𝗿 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:
✔️ Inflation cooled to 2.8%
✔️ 228K jobs added in March
✔️ Unemployment rose to 4.2%
✔️ Consumer sentiment dipped to its lowest since 2022
Small businesses continue to show resilience, with optimism inching up and business starts outpacing pre-pandemic levels.
Check out the full report to see how these trends could impact your strategy!
Report
Lending Conditions Chartbook Q1 2025
In our Q1 Lending Conditions Chartbook, we break down the latest economic trends and dive deep into credit conditions across products and regions.
Insights include:
- The labor market appears on decent footing but there are signs of slowing.
- Credit growth remains subdued and is running below its pre-pandemic average as financial institutions maintain tight lending standards and interest rates remain elevated.
- Looking at origination activity, there has been a meaningful pickup among fintechs and in unsecured personal loans.