California Consumer Confidence Hits 4-Year Low

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An early warning sign of bill-paying problems is flashing for California and the nation.

To check Californians’ financial health, my trusty spreadsheet examined consumer debt statistics compiled by the New York Fed. These numbers for 2024’s final three months provide a window into the bill-paying habits of roughly 90% of the population with credit histories.

Ponder a metric that tracks debts moving into 30-days-or-more-late status. Basically, we’re talking about the first skipped payment.

As 2024 ended, 3.25% of California borrowings fell into this worrisome bucket – the highest level since 2016’s first quarter. Yes, almost nine years ago, when the economy’s rebound from the Great Recession was kicking into high gear.

Nationally, skipped payments are even higher: 4.14% of debts entered the earliest of tardy status in the fourth quarter. It’s the biggest boost since the first quarter of 2020, just before the coronavirus upended the business climate.

Now, for context, this level of skipped bills is below the pace 2003-2005, boom times just after the turn of the century.
And 2024 is nowhere near the wave of early missed payments during the Great Recession. In 2009-10, these late payments averaged 14.4% of debts in California and 10.8% nationally.

Still, today’s growing bill-paying pressures help explain rising consumer angst, anxieties that are otherwise contradicted by economic yardsticks that suggest a robust economy.

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