Quarterly Consumer Loan Charge-Off Rate Prediction

The Federal Reserve Bank just reported the Consumer Loan Charge-off Rate (CLCOR) for the fourth quarter of 2022. According to the data published back in Nov 2022, the total seasonally adjusted CLCOR figure for 2022Q3 was 1.28%, above 2022Q2 level at 1.10%. Since 2021Q3, the historic bottom of the series, the CLCOR has been increasing. Our forecast before the recent published data predicted another step in the increasing trend at 1.33%. The new published data for CLCOR at 2022Q4 is 1.65% which is 25 percent higher than its previous quarter.

https://fred.stlouisfed.org/graph/fredgraph.png?g=WrnF Also, the Delinquency Rate for Consumer Loans continued its increasing trend in 2022Q4 following the upward trend of its previous quarters.

https://fred.stlouisfed.org/graph/fredgraph.png?g=STMp If this rapid growth in delinquency and charge-off rates continues, we may see the pre-pandemic levels much sooner than anticipated. Below, you can see the performance of our predictions against the actual values since 2015Q4 that we started predicting CLCOR on a regular basis.

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