Consumer fragility index rises but remains moderate in 2nd quarter of 2026

Estudios Técnicos Inc. reported that its Consumer Financial Fragility Index rose to 42.2 points on a 0-100 scale, remaining within the moderate fragility band but reversing the improvement seen earlier in the year.

By THE STAR STAFF

Puerto Rico households experienced noticeable tightening in their financial conditions during the second quarter of 2026, according to new figures released by Estudios Técnicos Inc. (ETI).

The firm reported that its Consumer Financial Fragility Index (ETI-FFI) rose to 42.2 points on a 0-100 scale, remaining within the moderate fragility band but reversing the improvement seen earlier in the year.

The second‑quarter reading represents an 8.5‑point increase from the first quarter’s 33.7 points, which had been the lowest level of fragility in more than 12 months. Even with the recent uptick, the index remains far below the levels observed during the pandemic, when it reached 64.7 points in the second quarter of 2020. ETI noted that the trajectory so far in 2026 shows a marked improvement at the start of the year followed by a partial rebound in financial stress during the spring.

ETI attributed the rise in the index to a broad weakening across all six components of the indicator. The most significant change came from consumer loan delinquency, which increased from 2.62% in the first quarter to 3.07% in the second. Other measures also deteriorated, though more gradually. The unemployment rate edged up from 5.60% to 5.80%. Mortgage delinquency rose from 1.10% to 1.23%. Personal bankruptcy filings increased from 939 to 952 cases. Real income slipped from $24,748 to $24,516. Meanwhile, the average interest rate on credit cards remained elevated at 20.94%.

Leslie Adames, director of economic analysis and policy at ETI, emphasized that the significance of the quarter’s results lies not in the size of the increase but in its breadth. All six components moved in the same direction, signaling a generalized tightening in household finances. He noted that when borrowing costs remain high, unemployment rises and real income erodes, households inevitably face greater difficulty meeting their obligations. Although the index focuses on consumer loans and residential mortgages, Adames pointed out that recent data from the Federal Deposit Insurance Corp. also show rising delinquency in auto loans at commercial banks.

The report underscores that the aforementioned pressures are unfolding in an environment where credit remains expensive and inflation continues to limit purchasing power. While financial markets currently assign a lower probability to additional increases in the federal funds rate, long‑term interest rates could keep financing costs elevated. Inflation in Puerto Rico eased slightly from 4.61% in May to 4.21% in June, but remains among the highest readings since early 2023, reducing the margin households have available to manage their debts.

Adames described the latest index reading as a reflection of “two sides of the Puerto Rican consumer,” noting that households are still meeting their obligations but with less room to maneuver. He added that the second‑quarter increase should be viewed as an early warning sign worth monitoring closely during the remainder of the year, particularly in a context of still‑high interest rates and persistent inflation.

The ETI‑FFI is constructed using six variables: delinquency in consumer loans and residential mortgages, personal bankruptcy filings, unemployment, real income and average credit card interest rates. The index ranges from 0 to 100 and is divided into four fragility bands: low, moderate, high and extreme.