Monday, December 15, 2025
Five years ago, pandemic stimulus checks and low interest rates allowed people to spend and borrow freely. High income households bought luxuries like cars, vacations, and home upgrades.
Today, the U.S. economy is sitting on a massive pile of debt. As of the second quarter, consumer debt hit $18.4 trillion.
You might think this debt is mainly from lower income households. Not true. Defaults are rising among those with the deepest pockets.
Increasingly, there are signs of a major pullback in spending as high earners struggle to finance their debt. A warning perhaps? It seems so since stress is building where it usually doesn’t.
Delinquencies are surging among Americans who make over $150,000 a year. They’re falling behind on credit card and auto loan payments faster than anyone else, according to credit scoring firm VantageScore. Delinquency rates for this crowd have surged nearly 20% over the past two years.
Worse, the labor market seems to be cooling off via hiring freezes. AI is taking white collar jobs now too. So, debt is rising and the money used to pay off those debts is getting harder to earn.
Perhaps the biggest sign of impending spending doom is Norwegian Cruise Line posting quarterly revenue of $2.94 billion yet falling short of Wall Street’s expectations of over $3 billion. The company also released guidance calling for less consumer spending during the holidays and the rest of the fourth quarter.
That’s just one slice of the economy. But when cruise operators start expecting a slowdown, it’s worth paying attention.