Your Weekly Advisor Update

A Note From Kelly Anne:

There have been murmurs about the economy teetering toward a recession, but a strong labor market has warded off an actual downturn—perhaps until now. 

New data suggests that the economy is wilting. Young adults are struggling to make their auto loan payments, with serious delinquencies at their highest level since the Great Recession.

This week, we’re diving into why these delinquencies are happening—and what it may mean for the overall economy.

Best,

Kelly Anne

Kelly Anne Smith  Deputy Editor, Growth Projects

Forbes Advisor

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Is The Economy Running Out Of Gas? 

Despite high inflation, rising interest rates and major layoffs in big tech, the economy has puttered along. But new data about auto loan delinquencies suggests that the economy’s low fuel light may finally have turned on.

Young adults are struggling to make their auto loan payments, with nearly 4.6% of borrowers under 30 years old in serious delinquency, meaning they’ve missed at least 90 days of payments. 

While that may not sound like a lot, a look back at delinquency levels reveals a troubling upward trend. The delinquency rate for borrowers under 30 years old is up 1.56 percentage points from a year earlier and is now at its highest level since the Great Recession.

And it’s not just young people struggling to make their car payments. Auto loan delinquencies for nearly all age groups went up in the first quarter of this year. Cars are more expensive than they were pre-Covid, meaning households are saddled with more debt—and inflated prices for everyday purchases, combined with wages that haven’t increased with inflation, are stretching people’s finances thin.

It’s important to note that higher delinquency rates don’t always foretell a recession—but they are a strong indicator that the economy is slowing down. We’ll see.

Here’s what else you should know
this week:

June 2023 Stock Market Forecast 

For now, investors are taking hope from the decent first quarter earnings season and a possible Fed rate increase pause, which sets the table for a solid market in June.

85% Of LGBTQ+ Americans Experience Financial Anxiety: Survey  

For this Pride Month, Forbes Advisor conducted a survey to uncover how LGBTQ+ Americans feel about the state of their finances. The survey found that 85% of LGBTQ+ adults experience financial anxiety. Factors such as discrimination and a lack of access to appropriate resources may be causing more financial distress among the LGBTQ+ community.

Average Salary By Age In 2023 

We compiled data on the average salary by age. How does your salary compare? 

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