Transcript:
Conway Gittens: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
There’s a mixed vibe on Wall Street this Thursday as a rally in AI-related stocks take a pause. On the earnings front, American Airlines is bucking the trend of good news from the airline sector. Fourth-quarter results came in better than expected but the company warned this quarter will be a money-losing one. American Airlines (AAL) is struggling to fix a frayed relationship with its corporate clients.
Related: Americans can expect major change to credit card rates in 2025
Turning to other business headlines, the mighty American U.S. consumer is showing signs of credit card strain. The number of credit card borrowers who are only making their minimum monthly payments jumped to 10.75 percent in the third quarter, according to a report released by the Philadelphia Federal Reserve. That number hasn’t been that high in over a decade.
Delinquency rates are also on the rise. The number of credit card accounts that had a late payment of more than 30 days jumped to 3-1/2 percent, which is double the lows seen when pandemic-era stimulus checks helped consumers shore up their balance sheets. While the rise in late payments is noticeable, it is nowhere near what we saw during the financial crisis, when the late payment rate peaked at 6.8 percent.
The report serves as a reminder that even though the overall economy remains healthy, the job market is steady, and the annual average wage gain is outpacing inflation, there are pockets of consumers who are still struggling. Food is expensive. Rent is expensive. And since the Fed pushed interest rates from near zero to a peak of 5.25 to 5.5 percent -charging anything on a credit card is more expensive. There was some relief in 2024, when the Fed lowered its key lending rate by a full percentage point, but there’s uncertainty about how much lower interest rates will go in 2025.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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