New Yorkers’ debt woes grow amid slide in real income

investmentnews.com:

New Yorkers are having trouble keeping up with debt payments as their incomes get squeezed by one of the country’s highest inflation rates, according to a new study. 

Consumer debt in the biggest US city has been growing faster than household earnings, and the cost of servicing that debt is increasingly weighing on residents, according to research published this week by the Office of the New York City Comptroller and the Federal Reserve Bank of New York. The study was based on anonymized credit reports from Equifax.

Americans in general are feeling the strain of high interest rates, with delinquency rates ticking up nationwide on credit card and auto loans. But for much of the country, that’s at least being offset by a slowdown in inflation. 

Not in the Big Apple, where it’s headed in the opposite direction. 

The local inflation rate, which was well below the national one for most of the Covid period, has climbed a full percentage point since the start of this year. It reached 4.1% last month, ranking alongside Dallas as the highest among major cities in the mainland US, while the countrywide figure dropped below 3% for the first time in more than three years. 

That’s taking a toll on New York living standards. Inflation-adjusted wages have fallen to an eight-year low, according to the study, and the drop is especially acute in the city’s less wealthy neighborhoods. 

That’s partly because “we disproportionately lost high-income earners” as a result of population shifts in the pandemic, said Brad Lander, the New York City comptroller, in a phone interview. “A lot of the new job growth in the city in recent quarters has been in relatively low-wage sectors like health care and social assistance.”

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