Credit Sesame’s personal finance news roundup May 17, 2025. Stories, news, politics and events impacting personal finance during the past week.
Consumer outlook darkens in April survey
The April 2025 Survey of Consumer Expectations from the Federal Reserve Bank of New York showed economic gloom is increasingly clouding people’s outlooks. Consumers expect inflation to rise over the next three years. They anticipate that wage earnings and household income will fall. Respondents also foresee a rise in unemployment and a greater chance of missing a debt payment within the next three months. At the same time, they expect spending to grow faster than both income and inflation. See report at NewYorkFed.org.
Fed finds credit trouble spreading
A May 2025 report from the Federal Reserve Bank of St. Louis found that late credit card payments are rising across a broad range of households. Delinquencies are highest in the lowest 10 percent income areas but are also climbing in the top 10 percent. The share of credit card debt in delinquency is approaching levels seen during the 2008 financial crisis. More people are now behind on payments than during that period. See report at StLouisFed.org.
U.S. and China hit pause on tariff hikes
As of mid-May 2025, the U.S. and China have agreed to delay the harshest tariff increases they originally announced. Instead of the 145 percent rate outlined in April, the U.S. will impose a 30 percent increase over the next 90 days. China, in turn, will limit its tariff hikes to 10 percent instead of the threatened 125 percent. It is a temporary reprieve, but it signals both countries are at least willing to negotiate rather than escalate. See article at Reuters.com.
Banks tighten up credit card lending
The Federal Reserve’s May 2025 loan officer survey showed lending standards for most types of consumer credit were unchanged in the first quarter. However, banks tightened the standards for credit cards. Some also reduced credit limits, a clear sign of growing caution. Demand for most types of consumer loans weakened during the same period, though demand for auto loans stayed about the same. See loan officer survey report at FederalReserve.gov.
Card delinquencies hit post-recession high
In the first quarter of 2025, credit card delinquencies rose to 12.31 percent, the highest level since early 2011, when the country was still emerging from the Great Recession. Total consumer debt climbed to 18.2 trillion dollars, up 167 billion dollars from the previous quarter. Card balances dipped slightly, which is typical after the holiday season. Auto loan balances also declined, while balances for mortgages, home equity loans, and student debt rose. Student loan delinquencies jumped following the return of federal reporting, but at 7.74 percent, the rate remains below its pre-pandemic peak. See report details at NewYorkFed.org.
Inflation ticks up but stays mild
Consumer prices rose 0.2 percent in April 2025, following a slight dip in March. That brings the annual inflation rate to 2.3 percent, a relatively modest pace. New tariffs have yet to significantly affect pricing, as businesses continue working through older inventory and exemptions. Core inflation, which excludes food and energy, also rose by 0.2 percent in April and is up 2.8 percent over the past year. See Consumer Price Index summary at BLS.gov.
Retail sales growth nearly stalls in April
According to an early estimate from the Census Bureau, retail sales in April 2025 rose by just 0.1 percent. That is a sharp slowdown from the 1.7 percent surge in March, when consumers rushed to buy ahead of expected tariffs. The auto industry shows the swing clearly. Sales jumped 5.5 percent in March but fell by 0.1 percent in April. With tariff policy still in flux, more erratic swings in consumer spending may follow. See report at Census.gov.
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