Newly published figures on lapsed car payments signaling growing “consumer stress” may be the evidence needed by the Biden administration’s detractors to accuse federal authorities of fiddling with economic data for political purposes.
Speaking at an event hosted by Barclays Bank this week, the chief financial officer of auto loan giant Ally Financial, one of the largest vehicle financing companies in the US, painted a picture of deteriorating economic health among borrowers.
“We’re clearly dealing with a cohort of borrowers who have been struggling with the cost of living and now are struggling with an employment picture that’s worse,” company officer Russell Hutchinson said.
Delinquencies on payments of over 60 days and debts considered unlikely to be recovered have increased above earlier projections, and Hutchinson expects loan stress “to expand in coming months, just given the size of this population of struggling borrowers.”
Ally Financial provides financing and leasing services to over four million borrowers, issuing 1.2 million loans in 2023, has seen its past due debts creeping upwards in recent months.
Data analytics and credit reporting agency Experian PLC recently calculated a 400% spike in monthly payments of $1,000 or more in the second quarter of 2024 to 4% total – up from 1% four years ago. Similarly, loans at least 30 days past due have jumped from 5% in 2021 to about 8% today.
The poor economic numbers come after many months of claims by the Biden administration’s opponents that the government has been fiddling with economic figures toward political ends. “The Harris-Biden administration has been caught fraudulently manipulating job statistics to hide the true extent of the economic ruin they have inflicted upon America,” former President Donald Trump wrote in a social media post last month, citing a Bureau of Labor report showing that it had overestimated job growth during the period between March 2023-March 2024 by some 818,000 total jobs.
In a Harris Poll taken earlier this year, majority of Americans (56%) said they believed the US economy had sunk into a recession, with 49% believing unemployment is at a 50-year high and 72% saying inflation is rising, despite official figures suggesting otherwise.
Adding insult to injury, President Biden has been caught exaggerating the poor state of the economy when he took office, falsely claiming in May that inflation stood at 9% in January 2021 (in reality it was at 1.4%, rising to 9.1% during his first year as president).
“No president has had the run we’ve had in terms of creating jobs and bringing down inflation,” Biden said in a media interview in the spring, two months before dropping out of the 2024 race and endorsing Vice President Harris.
A post-debate YouGov poll this week found Trump dominating Harris on eight key election issues, including the economy (40% compared to 25% “very well” rating for Trump vs. Harris, respectively), inflation (38% compared to 23%) and taxes (35% compared to 26%).
That poll’s results appeared to challenge near cross-the-board claims that Harris handily won the debate, and weeks of polling indicating that she’s leading Trump between 1 and 5 points nationally, and ahead in key swing states as well.