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Consumer spending may be up, but so is household debt, a new report from the New York Fed shows

1. Household debt reached $18.39 trillion, indicating rising financial strain. 2. 4.4% of household debt faces delinquency, described as 'elevated' by the Fed. 3. Consumer spending rose 0.3% in June, despite mixed economic signals. 4. Weakening job growth contrasts with a strong stock market performance. 5. Subprime borrowers are increasingly distressed as their share of loans rises.

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FAQ

Why Bearish?

Rising household debt and delinquency rates create economic uncertainty; similar past trends led to market downturns.

How important is it?

Increasing debt and delinquency can disrupt consumer spending habits, directly affecting S&P 500 company revenues.

Why Short Term?

Immediate effects from rising debt levels may shake investor confidence quickly, as seen in previous economic slowdowns.

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