It may be time to start worrying about weakening consumer credit in the US, writes Lisa Abramowicz for Bloomberg Gadfly.

UBS analysts wrote in a report on Wednesday that US non-mortgage consumer debt has risen to an unprecedented level of 20% of the nation’s annual economic output, and consumers are increasingly unable to pay it off.

Capital One’s first quarter earnings results released on Friday reflected the trend, with its US credit card unit’s write-off rate reaching its highest point in almost six years. “This isn’t just a one-quarter blip. This is a change,” warned Ryan O’Connell of Bloomberg Intelligence Unit on Wednesday.

While UBS analysts don’t see the rising consumer debt problem as a systemic risk, they do argue that it has not been priced into the market.

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