From Peter Reagan
We are living through an economic crisis that will earn an entire chapter in introductory economics textbooks in the future…
Just a few of the many “highlights” this year:
- Retirement accounts have lost trillions.
- Historically high grocery, energy, and gas prices have persisted since May 2021.
- 49% of all small restaurants couldn’t pay their rent last month.
- Seemingly endless geopolitical conflict continues in Ukraine.
- Etc.
Right now, many Americans are struggling with economic hardship, thanks especially to higher inflation.
In fact, 63% of Americans are living paycheck to paycheck, and that includes some six-figure earners, according to a recent report:
As of September, 63% of Americans were living paycheck to paycheck, according to a recent LendingClub report — near the 64% historic high hit in March. A year ago, the number of adults who felt strained was closer to 57%.
Anuj Nayar, LendingClub’s financial health officer, put his finger right on the major issue:
Consumers are not able to keep up with the pace that inflation is increasing. Being employed is no longer enough for the everyday American. Wage growth has been inadequate, leaving more consumers than ever with little to nothing left over after managing monthly expenses.
Even the more affluent savers are cutting back on their holiday spending:
Getting shoppers to spend this holiday season won’t be easy.
The National Retail Federation said Thursday that it expects holiday sales during November and December to rise between 6% and 8% from last year — a decline when factoring in the effect of inflation. The sales forecast excludes spending at automobile dealers, gasoline stations and restaurants.
This isn’t promising, simply because consumer spending is the major driver of economic growth. Pullbacks in spending are often leading indicators of an incoming recession… Continue reading “Avoid Financial Hardship with a Stable Foundation”
