2013 was about slow but accelerating economic growth in America as consumers brushed off tax hikes, sequestration, a government shutdown, and broad fiscal brinksmanship.
Home prices continued to rebound and spending rose as unemployment rates dropped and people borrowed more. In fact the consumer is so strong that economists see 4% GDP growth in Q4.
And just today we learned that business investment was accelerating.
Unfortunately, there is one corner of the economy that is actually getting worse. And it’s the sub-economy populated by college grads.
While the unemployment rate for those with college degrees continues to be much lower than for those without, that gap has been narrowing sharply.
College grads are among those falling out of the labour force the fastest.
And as college tuition and fees inflate like crazy, real earnings for grads are actually falling.
Unable to make payments on their crushing student loan debts, grads of increasingly gone delinquent on their obligations.
“Delinquencies have trended lower across nearly every type of consumer credit category,” wrote economists from Wells Fargo Securities. “The one exception to this has been the ongoing rise in student loan delinquencies. The continued upward trend is reflective of the unique characteristics of the student loan market — such as the lack of credit history for most borrowers and the government sector being the dominant provider — as well as the weak recovery in jobs and wages for younger workers that have left increasingly large debt burdens more difficult to bear.”