S&P/Experian Consumer Credit Default Indices Show Default Rates Stable In August 2018

NEW YORK, Sept. 18, 2018 /PRNewswire/ -- S&P Dow Jones Indices and Experian released today data through August 2018 for the S&P/Experian Consumer Credit Default Indices. The indices represent a comprehensive measure of changes in consumer credit defaults and show that the composite rate was one basis point higher than last month, at 0.87%. The bank card default rate dropped four basis points to 3.52%. The auto loan default rate increased one basis point to 0.97%. The first mortgage default rate was up two basis points, to 0.65%.

Three of the five major cities recorded decreases in composite default rates in August 2018. Miami showed the largest decrease, falling 11 basis points to 1.57%. The default rate for New York fell four basis points to 0.83%, while the rate for Dallas fell two basis points to 0.84%. The default rate for Chicago increased five basis points to 0.91%, while the default rate for Los Angeles increased four basis points to 0.65%.

August 2018 saw a continuation of the trends of the prior three months, namely lower bank card default rates as well as lower default rates for Miami. Despite this, the overall composite rate has seen little movement, remaining within a 3 basis point range during this time. This is consistent with the longer term trend of stability for the composite rate, which has been between 0.81% and 0.97% in each of the past 41 months.

"Recent economic reports point to continued stability in consumer credit default rates," says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "A review of economic statistics covering the consumer economy is favorable. Job creation continues at about 200,000 per month with the unemployment rate just below 4% and wage gains are approaching a 3% annual rate. While jobs and incomes advance, the spending side is showing modest retail sales growth and auto and home sales are flat to down. These trends favor stable default rates in the near term.

"Non-revolving credit outstanding, principally auto loans,continue to grow by 4%-5% annually while balances on bank cards and revolving credit grew more slowly in the first half of 2018 than in 2017. Consumer balance sheets have been largely restored in the decade since the financial crisis and have room for further credit expansion. Interest rates for both groups of loans rose in response to gradual tightening by the Federal Reserve. Thirty-year fixed rate mortgage rates are now around 4.5%, auto loans at 5% or more, and bank cards in the neighborhood of 15%."

The table below summarizes the August 2018 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

For more information about S&P Dow Jones Indices, please visit www.spdji.com.

ABOUT THE S&P/EXPERIAN CONSUMER CREDIT DEFAULT INDICES

Jointly developed by S&P Dow Jones Indices LLC and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month. Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.

For more information, please visit: https://www.spindices.com/indices/indicators/sp-experian-consumer-credit-default-composite-index.

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500^® and the Dow Jones Industrial Average^®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has become home to over 1,000,000 indices across the spectrum of asset classes that have helped define the way investors measure and trade the markets.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.spdji.com.

ABOUT EXPERIAN

Experian is the world's leading global information services company. During life's big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organizations to prevent identity fraud and crime.

We have more than 16,000 people operating across 37 countries and every day we're investing in new technologies, talented people and innovation to help all our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group

SOURCE S&P Dow Jones Indices

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