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Investing.com -- U.S. consumers are cutting back on their spending as a response to rising prices and a deteriorating economic outlook, as reported by Synchrony Financial (NYSE:SYF), a consumer finance company.
The shift in consumer behavior comes as Americans are piling up more debt due to financial stress, as indicated by the Federal Reserve’s report of increasing delinquencies in auto loans, credit cards, and home credit lines.
Patrick Harker, President of the Philadelphia Federal Reserve, has issued a warning regarding potential issues for the U.S. economy. Signs of strain are appearing in the consumer sector, with consumer confidence also on the decline.
The financial retrenchment suggests that Americans, who are generally in a healthy financial state, are bracing for their finances to be under more pressure, according to Max Axler, chief credit officer of Synchrony. Despite the financial strain, most clients are maintaining their loan repayments, Axler added.
"Purchase volumes have decreased across the industry as consumers from all income groups are becoming more cautious about their spending," Axler said.
Synchrony, a company that issues credit cards in collaboration with retailers and merchants, manages over 100 million consumer credit accounts.
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