As the Biden Administration continues to tout the state of the U.S. economy, a growing number of Americans are struggling to make their monthly car loan payments.
The data from Cox Automotive shows that loans delinquent by more than two months increased by 5.3% in December compared to the prior month and skyrocketed by 26.7% from a year ago. This is a clear sign that the economy is not as strong as the Biden Administration would have us believe.
It is clear that high inflation is eating away at household income, and the public is becoming increasingly disapproving of the President’s handling of the economy.
Those with low credit scores and poor credit histories, who received subprime auto loans, are especially struggling to make payments. In December, 7.11% of subprime loans were severely delinquent, an increase from the prior month.
Despite more people missing loan payments, defaults on loans have yet to experience a similar surge. Auto lenders generally don’t consider the borrower to be in default until they’re 90 to 120 days late on payments, indicating a potential surge in defaults in the coming months.
The harsh economic realities for many Americans are only getting worse. A recent survey from Primeric report shows that 72% of middle-income families say their earnings are falling behind the cost of living, and 74% said they’re unable to save for their future. Both figures are up from a year ago.
Biden’s claims that inflation is slowing and take-home pay for workers is going up are simply not true. The most basic and fundamental costs of living, such as food and housing, have spiked. Grocery prices are up 11.8% year-over-year, while shelter costs are up 7.5% from a year ago.
Inflation has outpaced raw worker wages, which have consistently increased over the past two years under Biden. But when accounting for inflation, real average weekly earnings have plummeted by 3.1% since December 2021. Over the entirety of Biden’s presidency, wages have cumulatively risen by 10% while inflation has risen cumulatively by 14%.
It is clear that the Biden Administration’s policies are not working for the American people. The President and his team need to take responsibility and take action to address the economic struggles that so many Americans are facing. It is time for real solutions, not empty rhetoric.