A large swath of American consumers are facing financial hardship as they grapple with elevated living costs, record-high credit card use, and two years of negative real wage growth. This perfect storm could decimate financially fragile households in the next downturn.
As many as 89.1 million American adults (or about 38.5%) were found to experience some form of difficulty in covering expenses between April 26 and May 8, according to Bloomberg, citing new data from the Household Pulse Survey. This is up from 34.4% in 2022 and 26.7% during the same period in 2021.
The rising trend is alarming but not surprising. Consumers have been battered by two years of negative real wage growth.
As wages fail to outpace the cost of living, many consumers have burned through savings and resorted to credit cards. The latest revolving credit data shows consumers appear to be ‘strong,’ but that’s only because they use their plastic cards more than ever to survive.
The Household Pulse Survey found struggling households were primarily based across West Coast and the South.
Compared with the same period last year, the survey found 2.7 million more households were relying on credit cards to cover expenses.
Consumers have record card debt and ultra-low savings rates and are paying some of the highest borrowing costs in a generation (the average interest rate on cards now exceeds 20%). This debt is becoming insurmountable for some as delinquencies rise.
And what we have now is new debit and credit card data published by the Bank of America Institute that shows not just spending slowdown for lower-income consumers, but also the upper-income cohort is finally starting to crack.
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RFK, Jr. – Authentic Americanism That Loves Liberty, Loathes Lockdowns, Upbraids Abe
https://www.unz.com/imercer/rfk-jr-authentic-americanism-that-loves-liberty-loathes-lockdowns-upbraids-abe/
Same post on many articles. A bot or a believer?
This is the main problem with consumerism, hedonistic fulfillment first at any cost. People will spend themselves into bankruptcy because like obese people they won’t stop doing what is killing them. Its to easy to just whip out a card and pay for the pizza and beer night.
My parents were encouraged to save, credit was hard to come by. Now its reversed, you are encouraged to spend your way out of recession, or downturns. Its ludicrous.
Want freedom, learn to save money, buy only what you need and stay away from debt. Debt is like willfully signing up to be a slave. You are not free when indebted to anyone, any bank or any govt, you are their slave.
Freedom from income and property taxes?
We are all slaves, get over it.
Its douche bags like you who welcome their chains are the problem today.
Nobody will complain if you want to keep yours. enjoy.
Please share with us how you don’t pay taxes.
I have in the past. Don’t need to keep repeating it. maybe do a little homework and find out for yourself.
Wrong headline. It should read.
Idiots who spend more than they earn suffer the consequences of their actions!
https://tradingeconomics.com/united-states/money-supply-m1
Click on max or 25yr.
Fractional Reserve Banking anyone?