These warning signs could mean bad news for the economy. For example, a rise in loan delinquencies can be linked to excessive credit growth and the buildup of household debt — which are both warning signs of a coming recession. Although a large buildup of debt can be a warning sign, it’s important to remember that delinquencies can also rise as a result of a recession.
These days, many people are falling behind on their auto loans, with Fitch Ratings finding that default rates on auto loans exceed the levels during the Great Recession and are at their highest level since 1996. What’s more, credit card default rates are climbing again after hitting a low in 2015.
