Core Insights - The state of household finances is deteriorating, yet remains relatively stable compared to pre-pandemic levels [2][8] - Delinquency rates for various forms of debt have increased, with total delinquent debt reaching 4.8%, the highest since 2017 [6][9] - Despite worsening metrics, consumer spending continues to rise, indicating that households still possess financial resources [8] Debt and Delinquency Trends - The New York Fed's report indicates a rise in early delinquency for mortgage and student loans in Q4, attributed to the resumption of payment reporting post-pandemic forbearance [2] - Delinquency rates for auto loans, credit cards, and home equity loans remained steady, but overall delinquency rates have worsened from previous lows [5] - The total amount of delinquent debt has returned to pre-pandemic levels, reflecting a normalization of household finances from unusually strong conditions [7][8] Economic Activity and Consumer Behavior - Economic activity metrics, such as personal consumption expenditures, have continued to increase despite the decline in household financial health [8] - The increase in delinquent debt is primarily concerning for lower-income households, but the overall risk remains limited, with seriously delinquent debt-to-income ratios around 2.5%, similar to levels seen in late 2019 [9][10]