Shhh... Recession forgot to tell retailers it is here...

I think just like the US government like some individuals live well beyond their means.
Not a sound fiscal plan IMHO but you don’t need an econ degree to understand that.

 

Sadly the experts on wall street use this data to make forward looking predictions on where the economy is heading.

That in part is why oil had dropped back despite OPEC cutting production. Many think a slow down is coming not a shock when the FED raises rates 500 basis points in a year.
Less disposable income as you’re paying more to service your debt.

 

And that’s on the heels of people having the highest savings rates in decades. People burned through that cash and now are borrowing, at much higher rates than before.

 

One thing you’re missing is that interest rates are much higher now than they have been since 2006. That alone will put more strain on finances for most everyone.

Not sure what your last comment has to do with any of this.

 

I guess you chose to ignore the higher cost of credit and it’s effect on individuals bottom line and ability to be consumers. Simply put people have to burn more cash due to higher interest rates and have less money for other “needs”.


Hell, it’s part of the reason the US is getting closer to the debit ceiling than predicted again.

 

I see your point of it moving back to the trend average. However, I think the slope of that trend is hideous and due to our fiscal policy the past 15 years. The trajectory from 1990-2010 was much better in my lay opinion.

 

I’m sure you have a chart to show that.

Does it factor in the massive inflation made worse by Biden’s stimulus bill?
Does it factor in the cost of borrowing money because the Fed had to hammer down inflation.

All these things will keep working their way through the economy what we see today isn’t what we will see in 6 months. Businesses will place their bets on that. Smart people will do the same.

 

We aren’t just talking about $1200 checks man.
We are talking about Trillions of dollars injected into the economy by Federal Governments and Central banks.
There is at least a 5 trillion dollar jump since 2019. About a 30% increase in a very short time.

US M2 Money Supply


I also have posted numerous articles from left leaning sites arguing that Biden’s fist covid relief package added about 3% to the the inflation rate. (from 5% to 8%).

Furthermore people making more money are gonna pay more taxes and often do see a direct increase in their take home pay as they more to a higher bracket.

 

Inflation was higher than real wages for over a year in a half (April 2021- Jan 2023). People had to use credit to survive. Now that real wages are higher than inflation (not by much), where does the debt from the prior year and half come in? Interest rates have risen over that period. Low wage workers are having to get 2nd jobs or make money from gigs on the side or gov't support. The libs like the last one. They like to keep those sucking the teet. The middle class is surviving. The wealthy are not affected.

 

Investors say that the long-awaited recession is almost here, and it will arrive with a drop in the stock market. The economy this summer was apparently propped up by blockbuster movies and concert tours. Delinquency rates on credit cards and auto loans are increasing, and the hold on student loan payments instituted during the pandemic is about to be lifted. Some chemical plants are already starting layoffs.

The Mighty American Consumer Is About to Hit a Wall, Investors Say

 

May or may not happen at this point.
I will say Oil pushing higher won’t help but China’s post covid recovery has been anemic.

Talking heads are all trying to push equities down in October.
I’ve take some profits recently to be able to buy sale price equites like I did in December last year.
Lucky for me I’ve still got a longer term outlook.

There still is a ton of Federal money coming from the “infrastructure and inflation “ acts.

 

Student loan repayments take a bite out of the economy, and bring the U.S. closer to recession. The payments had to be re-started, of course.

Student loan repayments waste no time weighing on shoppers' wallets

 

Harvard researchers believe they have figured out why people are less than optimistic regarding a fairly positive economy. It's the interest rates. High inflation levels have kept interest rates high, which is disproportionately affecting poor people who borrow more than they should to deal with life's daily expenses.

Harvard researchers think they know why the booming economy still isn't being felt by average Americans