A recent Moody's report showed new credit card delinquencies hit 7.2% in the second quarter, up from 6.5% in the first quarter. As for new auto loan delinquencies, the rate topped 7.3%, compared with 6.9% in the first quarter.

Moody's expects new credit card and auto loan delinquencies to continue "rising materially" through the rest of the year and top sometime in 2024 at 9% and 10%, compared with 7% pre-Covid.

"The increase in delinquencies and defaults is symptomatic of the tough decisions that these households are having to make right now — whether to pay their credit card bills, their rent or buy groceries," Mark Zandi, chief economist at Moody's Analytics, told The Washington Post.

A weakening labor market and tapped-out consumers, some of whom have $1,000 monthly auto payments, are finding it difficult to pay not just shelter costs, put food on the table, but service their car payments. We've outlined to readers in the last three quarters, "Massive Wave" Of Car Repossessions And Loan Defaults To Trigger Auto Market Disaster, Cripple US Economy and Negative Equity Surges: More Consumers Find Themselves In Underwater Auto Loans — and it's only a matter of time before the repo wave begins. We noted in July that Repos From Auto Loans That Originated In 2020 And 2021 Are Skyrocketing.