Business

The cornerstone of the US economy is raising some serious red flags, UBS says

US consumers are finding it increasingly difficult for their incomes to comfortably cover all expenses. And it could mean that some will be unable to repay their debts, according to a UBS report. 

As many as 44% of consumers said their incomes don’t cover expenses, up from a year ago and an above average reading, according to the report, which surveyed roughly 2,100 respondents. In addition, 40% said they had a problem getting a credit card or applying for a student loan default, up 3% from last year. 

“Credit trends in US consumer markets are more worrisome, particularly in unsecured loan markets as the lower-tier consumer comes under further pressure with lending standards tightening, delinquencies rising, and interest rates near peak levels, ” wrote Matthew Mish of UBS in the report. 

The report shows that as macroeconomic trends deteriorate, they’re starting to impact the US consumer. Even UBS has lowered its expectations for US growth through the end of next year. The firm lowered its 2020 gross domestic product forecast to 1.3%, and its unemployment forecast to 4.1%.

Read the full article at Business Insider.