The US’ spending problem is starting to become a major issue.
According to the latest Monthly Treasury Statement, in June, the US collected $225BN in tax receipts – consisting of $110BN in individual income tax, $91BN in social security and payroll tax, $4BN in corporate tax and $20BN in other taxes and duties- a drop of 2.9% from the $232BN collected last July and a reversal from the recent increasing trend…
… and in July, the 12 month trailing receipt total was barely higher compared to a year ago, up just 0.4% Y/Y after rising as much as 3.1% at the end of 2017.
… where the money was spent on social security ($83BN), defense ($49BN), Medicare ($24BN), Interest on Debt ($35BN), and Other ($111BN).
This resulted in a July budget deficit of $77 billion, in line with expectations, and a signification deterioration from the $43 billion recorded in July of 2017.
The July deficit brought the cumulative 2018F budget deficit to over $684BN during the first 10 month of the fiscal year, up 28% over the past year.
Despite a booming economy, many Americans are having trouble paying credit card bills, industry observers warn.
An increasing number of auto borrowers are also asking for more time to pay.
These trends disturb card industry experts.
“It is a problem we should watch,” says Bill Hardekopf, founder of LowCards.com.
“I would say that credit card defaults is definitely a cause for concern,” says Joe Resendiz, an analyst with ValuePenguin, which tracks the credit industry.
Resendiz noted the recent second quarter net credit card default numbers rose for Bank of America and JPMorgan. In an otherwise rosy report, the amount of in-default charge card bills rose by 10 percent and 9 percent respectively, compared with the same period in 2017.
But JPMorgan charge-off rates remain “low” on a historical basis, said spokeswoman Betty Riess.
The latest numbers also come at the same time that those with the poorest credit card records — subprime borrowers — saw their credit card debt increase by 26 percent, ValuePenguin said.