Though the March unemployment rate dropped only marginally from the February figure of 8.3% to 8.2%, U.S. prime credit card ABS chargeoffs declined to their lowest levels since 2008. Fitch’s Prime Credit Card Chargeoff Index for March recorded a three consecutive monthly decline and a 52-month low, with levels not seen since 2007 to 5.18%. Credit card defaults and late payments fell and late stage delinquencies dropped three basis points (bps) to 2.23% for the month, with 60+ day delinquencies 28% lower from the year ago period.
With the number of unemployed persons down from 12.8 million to 12.7 million, with long-term unemployed- for 27 weeks and over down from 5.4 million to 5.3 million-accounting for 42.5% of the total unemployed, early stage delinquent balances of borrowers who have missed at least one payment dropped four bps in March to 3.02%. In March, 2.4 million persons were marginally attached to the labor force because they haven’t searched for work in a month or more, among which there were 865,000 discouraged workers who feel there is no available work- down from the February figure of 1 million. The remaining 1.5 million marginally attached to the labor force in March had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
