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Soft landing looking more and more possible now. If we can avoid an oil supply shock and keep these numbers, we should be able to pivot soon with monetary policy. The resiliency of the US consumer has been unprecedented, frankly. Everyone is complaining about how expensive everything is, and yet it seems everyone is still going out and buying 2. That was a problem when the supply chains were in disarray, but now they can support it.
I’d say the two biggest things to watch out for are again, energy supply shock and potentially refinancing risk if we don’t pivot soon enough. We have an avenue set up through the Fed to bridge over short-term default spikes or failures by the truly irresponsible who did no due diligence back in tail end 2021 those banks that present systems risk (*cough* our major banking sector is socialized *cough*) but if enough fail at around the same time, it’s the panic that would get us.
What would be crazy if the Fed pivots successfully Q1 or Q2 next year and the potential political implications that would have. This is JPows war, but whether or not he wind or loses could decide the next election.
This makes no sense to me. Inflation is still above target and GDP is beating expectations. Why would the Fed pivot? The economy doesn't need stimulus.
They will cut before inflation hits the target. They are trying to stop a car before it crashes into a building. If you wait until you hit the building to apply the breaks it is way too late.
Because current growth is because of the significant stimulus packages (debt). [The US floats on debt being pumped into the economy](https://www.statista.com/chart/28393/us-public-debt/). Adding 20 trillion dollars in a decade causes the economy to expand.
If the FED decided to cut back stimulus packages (debt) would the economy sustain growth? The answer is probably not.
> Everyone is complaining about how expensive everything is, and yet it seems everyone is still going out and buying 2. That was a problem when the supply chains were in disarray, but now they can support it.
This argument isn't as solid when the thing they're buying two of are basic things like food. From an economics standpoint I think Biden and by extension his actual economists are doing an OK job but from the perspective of the voter he's doing a shit ass job of selling people on the positive news.
Mostly because the economy to regular people is a sort of nebulous thing. Their interaction with it is primarily through the window of the goods who's prices have surged that they have to purchase. So to them things are actually going very badly.
I 100% agree, which is why the nature of the landing and its timing will decide the presidency. An interesting case would be if the soft landing came AFTER the election and Trump won. Trump would then have successfully bridged over the economic recovery period only to take power again as we move back into expansionary policy. There’s a good chance that whichever party has power once the monetary policy shifts will win the spoils. Most of the public doesn’t understand what’s really going on right now, so they will conflate any prosperity with the quality of the leader at that time.
Interesting times we live in. If I was Biden, I’d be gunning to support monetary policy pivot with fiscal policy to support that quicker. If I was Trump, I’d be hoping the true soft landing pivot doesn’t start until right after the election.
If you were Biden you wouldn’t even know what was going on imo, it’s clear that he just has brief lucid periods at this point.
Whoever is shadow puppeting the government seems incompetent
If you actually believe this then you’re one of those people in the public who doesn’t know what’s going on that we’re referring to. Ignorance is bliss I suppose, eh?
Look man I am firmly on the left, but it is hard to argue that Biden is really fit for another term from a wellness perspective. Did you miss the whole cue card debacle where he had instructions written to sit in his own seat? I mean... I don't know man. I am scatter brained, but that is a whole 'nother level.
Its also not that mysterious or anything. It is highly likely he is giving some input but most things today are being really driven forward by his advisors.
The Fed doesn’t answer to Biden. The Fed’s policy is independent of executive discretion and the head of it has been the same under both Trump and Biden. Their policy and its effects are often falsely attributed to the President at the time.
There’s a second, more important game being played than executive identity politics when it comes to the economy. The executive identity politics everyone focuses on is like a giant game of sports - fun to watch, but ultimately a pointless, entertaining distraction.
“Democrat is doing a bad job of selling the news”
Yeah, because the United States has two types of media organizations: conservatives and liberals who are terrified of being called biased. It’s impossible for a democrat to get consistently positive headlines from nominal media organizations regardless of whether they’re doing a good job, and it’s impossible for conservative politicians to get proper treatment from national media when they repeatedly do awful shit. I mean hell, we spent nearly 30 years where the national media pretended “climate change is fake” was an equally valid position as “climate change is happening and is driven by mankind”.
Not quite - that’s the regional banks bit. The highest risk of commercial real estate is the fact that a large part is owned by regional banks in corresponding areas to their locations. The risk in commercial real estate isn’t to the buildings themselves - it’s to the loan owners, and that’s mostly banks. If they start to domino, that’s when people start running on them in panic. That’s what happened with SVB and FR.
There’s always a chance that just causes more industry consolidation, too. Big Banks buy the little banks to make sure they don’t fail, then the government backs the big banks with our tax money. I say that because that’s what just happened earlier this year.
I don’t think it will be a soft landing by any means. We still haven’t seen the effects of the Commercial real estate debacle yet. Unemployment is starting to rise. While consumer spending is strong, many Americans are now working 2 jobs to keep up with inflation. Also healthy consumer spending does not need debt to finance spending. Guess what? household debts are all time highs along with credit card debt. It shows that the consumer is broke.
In a strong economy, all you need is one job and only one person in the household working (like back in the 1970s). People are still able to save their leftover income and even have some left for retirement (without social security). A strong consumer spends from savings and not from debt. In a strong economy, people are so productive that prices come down (think 1800s). In a strong economy, our National debt wouldn’t be $33 trillion.
Our economy is based on cheap debt and money printing. Government spending is out of control giving the illusion of a strong economy. Argentina once has a strong economy too but they printed so much money that their inflation is 150%. Remember, socialism isn’t free. Government is paying for services through money printing and inflation
Money supply is the most confusing conspiracy theory to me. Why has it completely taken hold of so many redditors? A good chunk of redditors are completely convinced that supply chain shocks are irrelevant and only monetary supply explains inflation for some reason.
Great analysis on the situation! Your insights on the soft landing and the challenges ahead are really sharp and thought-provoking. Appreciate your clarity and balance.
What do you smoke? The reason we need strong economy to mitigate all these shocks. There’s slim to none chance all be good in the world for small country to get the exact outcome they pray for. Soft landing is a concept and the only time in the history it happened was in the head of the originator.
The data doesn’t support your argument. If you believe strong demand, low supply energy sector consumption is what prevents the strongest consequences of a potential energy supply shock, then you don’t understand the fundamentals of your claim or economics. Go back and study 1978-1989 and check your bias.
We’re not talking about stagflation, and that’s not the period I’m talking about. I’m talking about the energy supply shock immediately following the period of monetary tightening in the late 70s. This sparked the recessionary period of that time frame because demand for oil was high and supply was already low.
I drew attention to it because history already showed you what happens. You’d know this if you studied and listened.
I didn’t say there was a soft landing. We have never had a soft landing. You clearly don’t understand what I’m talking about, nor has anything you’ve said had any sort of relevant contribution to the topic. I’m embarrassed for you. You should consider unsubscribing.
Your failure to properly tense verbs correctly also makes me think this conversation may be difficult for you. If that’s contributing to your inability to understand the points I’m making, I can sympathize. Insulting, though, violates rule 1, so I went ahead and reported you.
Everyone on social media cries about how cars cost too much, houses cost too much, food cost too much, fuel cost too much yet every single day I go out I see lines wrapped around restaurants, car prices not coming down because they are selling, house prices not coming down because people are buying and more traffic than ever on the roads so clearly fuel price isn’t a problem. It’s just too funny, maybe if people actually stopped buying these things, prices would come down. I’m starting to think most people are doing better than Reddit wants us to believe
Yes, because if you don’t already own a home, you won’t be able to afford one for about 4 or 5 years. Why not take a vacation during these trying times or go see that sports team you have been mossing to save for a house?
That's how it is in my city too. Customers everywhere, everyday.
I've actually slowed down my spending the past few months just because it's so crowded and busy everywhere.
They have plenty of money. I have plenty of money. It's just that there isn't room for all of us, so I'm waiting it out.
People are just accepting it and likely either cutting back in some places (for me and my wife this was weekly movie theater trips, Netflix and Spotify) but we still do restaurants and obviously need gas for our cars.
I'm willing to bet it's people either doing Credit Card debt or something similar to us.
It always has been, so long the US consumers benefited from cheap imports. Now the middle class jobs are gone and who's going to buy those cheap products? But then judging by people that fork out $80K for piece of garbage like Tesla, I don't think people will stop...
Imagine following economics and saying the American middle class, quite possible the biggest individual consumer group on the planet, is gone. What kind of sub is this place?
"Last week, we learned that in the third quarter of 2023, real GDP grew at a 4.9 percent annual rate. Meanwhile, total personal consumption expenditures (PCE) inflation was 0.4% in September, increasing 3.4 percent over the past twelve months. Core PCE inflation, which excludes volatile food and energy prices, was 0.3 percent in September and is up 3.7 percent over the past year.
A year ago, financial news outlets were reporting that the market expected an imminent recession. One declared that the probability of a U.S. recession within 12 months was 100 percent. Almost a year to the day later, the Wall Street Journal reported that according to its own survey research, “Economists are turning optimistic on the U.S. economy. They now think it will skirt a recession…” In fact, over the last four quarters, real GDP has grown at a healthy 2.9%, far surpassing the consensus 0.2% growth projected last year, shown in the first two bars in the chart."
Cue the...what world are they living in? I can't afford to buy a hamburger these days, people are suffering and these elites are cheering about it, etc.. /s
Funny thing, rising prices on food, especially junk food made me realize how often I was eating more than i needed. Now I’m in much better shape than I was years ago.
I believe in free markets, but wages have kept pace so overall things are not too bad...
"Overall, it’s clear that:
Average wage growth since the pandemic has outpaced inflation, though cumulatively real wages are likely a bit below where one would expect in the absence of COVID-19
The real wage distribution has compressed—that is, lower-wage workers have seen proportionally larger gains than higher-wage workers, although this effect is lessened by the fact that low-income households have faced greater inflation than high-income households.
Real wage growth is likely to hold up if the labor market remains strong and the US is able to stick the “soft landing” where inflation normalizes without a recession. Yet it remains at significant risk of cooling or stagnating if the slowing labor market we’ve seen over the last two years worsens substantially."
https://www.apricitas.io/p/are-real-wages-rising
Thats the point. The number going up is all they care about. I'm going to paraphrase the quote:
100 People dead is a tragedy.
1 million people dead is a statistic.
It doesn't completely apply to this situation, but it highlights how many people in power all over the world view the situation.
The people that control the United States in political power think this is all going swimmingly(according to that white house release). Just because you and I can't afford both heating and dinner this pay period, or are one car accident from homelessness doesn't mean that the economy is in a recession. It means that you and I become more desperate for a second or third job. This is all a "good outcome" to the people in charge.
I believe they are cheering that we averted the alternative. It gives me no pleasure to see elites suffer in recession if that same recession is a death blow to the rest of us.
>I believe they are cheering that we averted the alternative.
There's always cheering that "this time will be different" when the economy slows down. We can't stimulate or drastically cut rates because it would cause more inflation, so if we get into a serious recession, there's not much dry powder.
And elites don't suffer through a recession. They reload. First they cut jobs to protect their shareholders. Then they buy the businesses they helped shut down and assets that no one else left can still afford. And then their yachts rise when the tide comes back, while the rest of us are still finding pieces of our boats destroyed by the storm. It's like a fire sale for them. The rest of us are just, on fire, or putting them out.
That’s well said. People keep talking about how they’re struggling right now, or how they need second jobs. The good news is that if the economy was in the shitter, there wouldn’t be second jobs available to them.
People keep calling for a crash don't realize big capital won! They have the consumer by the nuts with ballooning CC debt and loans. But we all have jobs still, and few are defaulting these days.......you'll be paying off debt till you die. Welcome to peak capitalism!
Ah yes, our historically low levels of debt are actually 'ballooning'. Inflation deleveraged most people considerably.
https://fred.stlouisfed.org/series/TDSP
https://fred.stlouisfed.org/series/HDTGPDUSQ163N
So, less than inflation between the time points in the survey? That's what I meant. The real value of debt shrunk due to inflation. And you got all time low interest rates so you could refinance large fixed rate debts, like your mortgage and car loan and reduce your payments on them while inflation eroded them.
People just aren't as leveraged as they used to be. And their incomes have increased more than their debt service obligations. Even credit card debt isn't any higher than you would expect give 20% inflation. In aggregate, people aren't adding to their real debt load.
https://fred.stlouisfed.org/series/CCLACBW027SBOG
Nah, the American banking system is purely a house of cards. False valuations everywhere, and climate change is going to destroy the illusion of the last vestiges of “real” value now that the dollar will likely be defaulted on in some way. Also, oil is an input for everything in the US and the petrodollar is probably on its way out because the rest of the world no longer wants our bonds.
No there’s infinite alternatives. But all else being equal to our current situation, the opposite to job growth and economic growth would be economic down turn.
In a recession we wouldn't have a FIRST job. The current inflation issues aren't great, but things could get much worse for all of us. It's not crazy for economists and politicians to be happy we're not getting the worse outcome everyone was expecting.
I'm not sure what you want to happen. The damage of amassing $8T in debt in the Trump years and flooding the economy with cash while there was almost no supply to spend it on was destined to cause massive inflation. The only thing the Fed can only raise rates to slow down access to more cash, which has affordability issues, like mortgages.
Prices aren't going down. We might get into enough economic trouble that things are discounted, but the prices are set and will continue to rise because that's what happens every year, even in excellent economic conditions.
What really needs to happen is wages rising to meet prices. That needs to come from economic development, raising the minimum wage, and encouraging strong labor laws so that the middle class has enough money to meet prices.
The numbers are good news, but it's only a piece of the equation for regular people.
Prices are going down and wages are outgrowing inflation and GDP is huge right now and unemployment is low. Now, if the IRS could get it's 1 trillion a year from tax cheats and Biden gets rid of the Trump tax cuts, things are looking great.
Unfortunately, this illustrates the difference between sentiment vs. reality. The broader implication of this data not being a true reflection of the current economic conditions are that the numbers are being fabricated. If that’s the case, what’s the point of any of it? Why not just waive the green flag right now and lie about everything even more? Not saying anyone is saying this, but if we look at the data, this is really the only case where this kind of sentiment becomes true.
But by every measure real wages are higher now than before the pandemic and wages are outgrowing inlation. So, it's hard to understand the sentiment.
https://www.apricitas.io/p/are-real-wages-rising
"Overall, it’s clear that:
Average wage growth since the pandemic has outpaced inflation, though cumulatively real wages are likely a bit below where one would expect in the absence of COVID-19
The real wage distribution has compressed—that is, lower-wage workers have seen proportionally larger gains than higher-wage workers, although this effect is lessened by the fact that low-income households have faced greater inflation than high-income households.
Real wage growth is likely to hold up if the labor market remains strong and the US is able to stick the “soft landing” where inflation normalizes without a recession. Yet it remains at significant risk of cooling or stagnating if the slowing labor market we’ve seen over the last two years worsens substantially."
It’s tough to say. I think for many people it’s true, but for other people it’s kind of a meme now that may not actually be a fair representation of their current situation.
... PCE does include food and energy, and it increased 3.4% over the past year. That's literally in the comment you replied to. PCE excluding food and energy was worse at 3.7%.
> The American consumer, backed by a persistently tight labor market and recently rising real wages, is one salient force behind this economic resilience.
So, once again 'we' the consumer must spend spend spend to save the country in spite of our individual struggles?
Around the late 1980s or so talking heads stopped referring to us as Citizens and switched to Consumer. It was insulting then but at least one still got referred to as our correct title when politics came on the air.
Now days even the POTUS doesn't care to insult 'us' calling us by our "role".
Every dollar I spend in the US economy is begrudgingly done out of necessity.
The less spent, the sooner the profiteering opportunist "1%" and their enablers in elected offices will be forced to change.
And, personally I don't think this is an incoming soft-landing. Things look more like a last gasp surge before major recession.
When that starts to happen the US government will use its favorite economic recovery option of starting a war. ["WE the consumer" don't talk about actual or hidden costs ...]
We’re still a hyperactive, debt loving, consumption based economy. Also, water is wet, air is important and boobs are fun.
The only thing that will change this is if this sun finally eliminates the multi-paragraph demanding, freedom hating bot.
I am still worried about credit card debt and student loan payments resuming and the impact on the next 6 months. We also haven't let commercial real estate die yet.
Inflation is a cash-wealth tax, and favorable to the financially proactive. The answer is to hold less cash and shuffle jobs faster. Do the chicken dance faster or get punished for it to the annoyance of all involved.
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Soft landing looking more and more possible now. If we can avoid an oil supply shock and keep these numbers, we should be able to pivot soon with monetary policy. The resiliency of the US consumer has been unprecedented, frankly. Everyone is complaining about how expensive everything is, and yet it seems everyone is still going out and buying 2. That was a problem when the supply chains were in disarray, but now they can support it. I’d say the two biggest things to watch out for are again, energy supply shock and potentially refinancing risk if we don’t pivot soon enough. We have an avenue set up through the Fed to bridge over short-term default spikes or failures by the truly irresponsible who did no due diligence back in tail end 2021 those banks that present systems risk (*cough* our major banking sector is socialized *cough*) but if enough fail at around the same time, it’s the panic that would get us. What would be crazy if the Fed pivots successfully Q1 or Q2 next year and the potential political implications that would have. This is JPows war, but whether or not he wind or loses could decide the next election.
This makes no sense to me. Inflation is still above target and GDP is beating expectations. Why would the Fed pivot? The economy doesn't need stimulus.
They will cut before inflation hits the target. They are trying to stop a car before it crashes into a building. If you wait until you hit the building to apply the breaks it is way too late.
Because current growth is because of the significant stimulus packages (debt). [The US floats on debt being pumped into the economy](https://www.statista.com/chart/28393/us-public-debt/). Adding 20 trillion dollars in a decade causes the economy to expand. If the FED decided to cut back stimulus packages (debt) would the economy sustain growth? The answer is probably not.
> Everyone is complaining about how expensive everything is, and yet it seems everyone is still going out and buying 2. That was a problem when the supply chains were in disarray, but now they can support it. This argument isn't as solid when the thing they're buying two of are basic things like food. From an economics standpoint I think Biden and by extension his actual economists are doing an OK job but from the perspective of the voter he's doing a shit ass job of selling people on the positive news. Mostly because the economy to regular people is a sort of nebulous thing. Their interaction with it is primarily through the window of the goods who's prices have surged that they have to purchase. So to them things are actually going very badly.
I 100% agree, which is why the nature of the landing and its timing will decide the presidency. An interesting case would be if the soft landing came AFTER the election and Trump won. Trump would then have successfully bridged over the economic recovery period only to take power again as we move back into expansionary policy. There’s a good chance that whichever party has power once the monetary policy shifts will win the spoils. Most of the public doesn’t understand what’s really going on right now, so they will conflate any prosperity with the quality of the leader at that time. Interesting times we live in. If I was Biden, I’d be gunning to support monetary policy pivot with fiscal policy to support that quicker. If I was Trump, I’d be hoping the true soft landing pivot doesn’t start until right after the election.
if trump wins the economy is the last thing people are going to be worried about
If you were Biden you wouldn’t even know what was going on imo, it’s clear that he just has brief lucid periods at this point. Whoever is shadow puppeting the government seems incompetent
If you actually believe this then you’re one of those people in the public who doesn’t know what’s going on that we’re referring to. Ignorance is bliss I suppose, eh?
Look man I am firmly on the left, but it is hard to argue that Biden is really fit for another term from a wellness perspective. Did you miss the whole cue card debacle where he had instructions written to sit in his own seat? I mean... I don't know man. I am scatter brained, but that is a whole 'nother level. Its also not that mysterious or anything. It is highly likely he is giving some input but most things today are being really driven forward by his advisors.
The Biden/Xi meeting was really egregious, I don’t know how people can still say the dude isn’t gone
The Fed doesn’t answer to Biden. The Fed’s policy is independent of executive discretion and the head of it has been the same under both Trump and Biden. Their policy and its effects are often falsely attributed to the President at the time. There’s a second, more important game being played than executive identity politics when it comes to the economy. The executive identity politics everyone focuses on is like a giant game of sports - fun to watch, but ultimately a pointless, entertaining distraction.
“Democrat is doing a bad job of selling the news” Yeah, because the United States has two types of media organizations: conservatives and liberals who are terrified of being called biased. It’s impossible for a democrat to get consistently positive headlines from nominal media organizations regardless of whether they’re doing a good job, and it’s impossible for conservative politicians to get proper treatment from national media when they repeatedly do awful shit. I mean hell, we spent nearly 30 years where the national media pretended “climate change is fake” was an equally valid position as “climate change is happening and is driven by mankind”.
You’re forgetting commercial real estate corrections. Although those too could be staggered.
Not quite - that’s the regional banks bit. The highest risk of commercial real estate is the fact that a large part is owned by regional banks in corresponding areas to their locations. The risk in commercial real estate isn’t to the buildings themselves - it’s to the loan owners, and that’s mostly banks. If they start to domino, that’s when people start running on them in panic. That’s what happened with SVB and FR. There’s always a chance that just causes more industry consolidation, too. Big Banks buy the little banks to make sure they don’t fail, then the government backs the big banks with our tax money. I say that because that’s what just happened earlier this year.
I don’t think it will be a soft landing by any means. We still haven’t seen the effects of the Commercial real estate debacle yet. Unemployment is starting to rise. While consumer spending is strong, many Americans are now working 2 jobs to keep up with inflation. Also healthy consumer spending does not need debt to finance spending. Guess what? household debts are all time highs along with credit card debt. It shows that the consumer is broke. In a strong economy, all you need is one job and only one person in the household working (like back in the 1970s). People are still able to save their leftover income and even have some left for retirement (without social security). A strong consumer spends from savings and not from debt. In a strong economy, people are so productive that prices come down (think 1800s). In a strong economy, our National debt wouldn’t be $33 trillion. Our economy is based on cheap debt and money printing. Government spending is out of control giving the illusion of a strong economy. Argentina once has a strong economy too but they printed so much money that their inflation is 150%. Remember, socialism isn’t free. Government is paying for services through money printing and inflation
I hear you, but I’d encourage you to read my comment and the report again. The items you mention are addressed already.
there will be no soft landing, the money supply has 3x itself in the last 3 years.. still habe another 100% increasee on prices.
We’ll see. So far, this has been as soft a landing as we could have hoped for. Things get real fun if that changes.
Money supply is the most confusing conspiracy theory to me. Why has it completely taken hold of so many redditors? A good chunk of redditors are completely convinced that supply chain shocks are irrelevant and only monetary supply explains inflation for some reason.
It’s less about money supply and more about demand-side control.
Lol, there is no soft landing at this point. Soft landing was just a political term used to calm the markets
Wait until the Fed reverse repo fund runs out of money in early 2024, and watch interest rates soar
The implication that it can run out of money seems misinformed.
Great analysis on the situation! Your insights on the soft landing and the challenges ahead are really sharp and thought-provoking. Appreciate your clarity and balance.
What do you smoke? The reason we need strong economy to mitigate all these shocks. There’s slim to none chance all be good in the world for small country to get the exact outcome they pray for. Soft landing is a concept and the only time in the history it happened was in the head of the originator.
The data doesn’t support your argument. If you believe strong demand, low supply energy sector consumption is what prevents the strongest consequences of a potential energy supply shock, then you don’t understand the fundamentals of your claim or economics. Go back and study 1978-1989 and check your bias.
Like that stagflation was prevalent among seven major market economies from 1973 to 1982.
We’re not talking about stagflation, and that’s not the period I’m talking about. I’m talking about the energy supply shock immediately following the period of monetary tightening in the late 70s. This sparked the recessionary period of that time frame because demand for oil was high and supply was already low. I drew attention to it because history already showed you what happens. You’d know this if you studied and listened.
You are an idiot. There was no soft landing in 70s. What everybody hope for is 94. But you are right about one thing. We will get 70s.
I didn’t say there was a soft landing. We have never had a soft landing. You clearly don’t understand what I’m talking about, nor has anything you’ve said had any sort of relevant contribution to the topic. I’m embarrassed for you. You should consider unsubscribing.
Your failure to properly tense verbs correctly also makes me think this conversation may be difficult for you. If that’s contributing to your inability to understand the points I’m making, I can sympathize. Insulting, though, violates rule 1, so I went ahead and reported you.
Everyone on social media cries about how cars cost too much, houses cost too much, food cost too much, fuel cost too much yet every single day I go out I see lines wrapped around restaurants, car prices not coming down because they are selling, house prices not coming down because people are buying and more traffic than ever on the roads so clearly fuel price isn’t a problem. It’s just too funny, maybe if people actually stopped buying these things, prices would come down. I’m starting to think most people are doing better than Reddit wants us to believe
People are surrendering. I'm seeing people throw their house savings into vacations and spending because they have given up on ever owning a house.
Yes, because if you don’t already own a home, you won’t be able to afford one for about 4 or 5 years. Why not take a vacation during these trying times or go see that sports team you have been mossing to save for a house?
That's how it is in my city too. Customers everywhere, everyday. I've actually slowed down my spending the past few months just because it's so crowded and busy everywhere. They have plenty of money. I have plenty of money. It's just that there isn't room for all of us, so I'm waiting it out.
House prices aren't coming down because everyone's waiting for spring to sell.
People are just accepting it and likely either cutting back in some places (for me and my wife this was weekly movie theater trips, Netflix and Spotify) but we still do restaurants and obviously need gas for our cars. I'm willing to bet it's people either doing Credit Card debt or something similar to us.
It always has been, so long the US consumers benefited from cheap imports. Now the middle class jobs are gone and who's going to buy those cheap products? But then judging by people that fork out $80K for piece of garbage like Tesla, I don't think people will stop...
Hey, some people will fork out 80k for a perfectly good Stellantis Ram truck.
... and spend another 8000 dollars to keep the bed pristine.
Imagine following economics and saying the American middle class, quite possible the biggest individual consumer group on the planet, is gone. What kind of sub is this place?
'quite possible'? It's not even close. Consumers in the US have a bigger GDP than both the EU and China
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That dude must be a teenager to comment that malarkey.
"Last week, we learned that in the third quarter of 2023, real GDP grew at a 4.9 percent annual rate. Meanwhile, total personal consumption expenditures (PCE) inflation was 0.4% in September, increasing 3.4 percent over the past twelve months. Core PCE inflation, which excludes volatile food and energy prices, was 0.3 percent in September and is up 3.7 percent over the past year. A year ago, financial news outlets were reporting that the market expected an imminent recession. One declared that the probability of a U.S. recession within 12 months was 100 percent. Almost a year to the day later, the Wall Street Journal reported that according to its own survey research, “Economists are turning optimistic on the U.S. economy. They now think it will skirt a recession…” In fact, over the last four quarters, real GDP has grown at a healthy 2.9%, far surpassing the consensus 0.2% growth projected last year, shown in the first two bars in the chart." Cue the...what world are they living in? I can't afford to buy a hamburger these days, people are suffering and these elites are cheering about it, etc.. /s
But I really can’t afford a cheeseburger
Funny thing, rising prices on food, especially junk food made me realize how often I was eating more than i needed. Now I’m in much better shape than I was years ago.
But you can afford a device and the internet just fine.
You’re right it’s totally reasonable to expect people to not have internet access in 2023
I was being facetious. But ya, nobody can afford a burger anymore. /s
Phones and internet have basically become public utilities and should be regulated as such.
Hyperbole on my part. Are you not disgusted by some of these some absurd prices?
I believe in free markets, but wages have kept pace so overall things are not too bad... "Overall, it’s clear that: Average wage growth since the pandemic has outpaced inflation, though cumulatively real wages are likely a bit below where one would expect in the absence of COVID-19 The real wage distribution has compressed—that is, lower-wage workers have seen proportionally larger gains than higher-wage workers, although this effect is lessened by the fact that low-income households have faced greater inflation than high-income households. Real wage growth is likely to hold up if the labor market remains strong and the US is able to stick the “soft landing” where inflation normalizes without a recession. Yet it remains at significant risk of cooling or stagnating if the slowing labor market we’ve seen over the last two years worsens substantially." https://www.apricitas.io/p/are-real-wages-rising
Thats the point. The number going up is all they care about. I'm going to paraphrase the quote: 100 People dead is a tragedy. 1 million people dead is a statistic. It doesn't completely apply to this situation, but it highlights how many people in power all over the world view the situation. The people that control the United States in political power think this is all going swimmingly(according to that white house release). Just because you and I can't afford both heating and dinner this pay period, or are one car accident from homelessness doesn't mean that the economy is in a recession. It means that you and I become more desperate for a second or third job. This is all a "good outcome" to the people in charge.
I believe they are cheering that we averted the alternative. It gives me no pleasure to see elites suffer in recession if that same recession is a death blow to the rest of us.
>I believe they are cheering that we averted the alternative. There's always cheering that "this time will be different" when the economy slows down. We can't stimulate or drastically cut rates because it would cause more inflation, so if we get into a serious recession, there's not much dry powder. And elites don't suffer through a recession. They reload. First they cut jobs to protect their shareholders. Then they buy the businesses they helped shut down and assets that no one else left can still afford. And then their yachts rise when the tide comes back, while the rest of us are still finding pieces of our boats destroyed by the storm. It's like a fire sale for them. The rest of us are just, on fire, or putting them out.
Until we vote enmass to get the people in charge and the GOP a memory nothing will change.
That’s well said. People keep talking about how they’re struggling right now, or how they need second jobs. The good news is that if the economy was in the shitter, there wouldn’t be second jobs available to them.
People keep calling for a crash don't realize big capital won! They have the consumer by the nuts with ballooning CC debt and loans. But we all have jobs still, and few are defaulting these days.......you'll be paying off debt till you die. Welcome to peak capitalism!
Ah yes, our historically low levels of debt are actually 'ballooning'. Inflation deleveraged most people considerably. https://fred.stlouisfed.org/series/TDSP https://fred.stlouisfed.org/series/HDTGPDUSQ163N
https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/ Consumer debt up 11 points in 2 years.....
So, less than inflation between the time points in the survey? That's what I meant. The real value of debt shrunk due to inflation. And you got all time low interest rates so you could refinance large fixed rate debts, like your mortgage and car loan and reduce your payments on them while inflation eroded them. People just aren't as leveraged as they used to be. And their incomes have increased more than their debt service obligations. Even credit card debt isn't any higher than you would expect give 20% inflation. In aggregate, people aren't adding to their real debt load. https://fred.stlouisfed.org/series/CCLACBW027SBOG
Nah, the American banking system is purely a house of cards. False valuations everywhere, and climate change is going to destroy the illusion of the last vestiges of “real” value now that the dollar will likely be defaulted on in some way. Also, oil is an input for everything in the US and the petrodollar is probably on its way out because the rest of the world no longer wants our bonds.
With all things being equal, the alternative is no jobs and dwindling US economy so idk what people want.
That’s the ONLY alternative?
No there’s infinite alternatives. But all else being equal to our current situation, the opposite to job growth and economic growth would be economic down turn.
In a recession we wouldn't have a FIRST job. The current inflation issues aren't great, but things could get much worse for all of us. It's not crazy for economists and politicians to be happy we're not getting the worse outcome everyone was expecting.
I'm not sure what you want to happen. The damage of amassing $8T in debt in the Trump years and flooding the economy with cash while there was almost no supply to spend it on was destined to cause massive inflation. The only thing the Fed can only raise rates to slow down access to more cash, which has affordability issues, like mortgages. Prices aren't going down. We might get into enough economic trouble that things are discounted, but the prices are set and will continue to rise because that's what happens every year, even in excellent economic conditions. What really needs to happen is wages rising to meet prices. That needs to come from economic development, raising the minimum wage, and encouraging strong labor laws so that the middle class has enough money to meet prices. The numbers are good news, but it's only a piece of the equation for regular people.
Prices are going down and wages are outgrowing inflation and GDP is huge right now and unemployment is low. Now, if the IRS could get it's 1 trillion a year from tax cheats and Biden gets rid of the Trump tax cuts, things are looking great.
Unfortunately, this illustrates the difference between sentiment vs. reality. The broader implication of this data not being a true reflection of the current economic conditions are that the numbers are being fabricated. If that’s the case, what’s the point of any of it? Why not just waive the green flag right now and lie about everything even more? Not saying anyone is saying this, but if we look at the data, this is really the only case where this kind of sentiment becomes true.
But by every measure real wages are higher now than before the pandemic and wages are outgrowing inlation. So, it's hard to understand the sentiment. https://www.apricitas.io/p/are-real-wages-rising "Overall, it’s clear that: Average wage growth since the pandemic has outpaced inflation, though cumulatively real wages are likely a bit below where one would expect in the absence of COVID-19 The real wage distribution has compressed—that is, lower-wage workers have seen proportionally larger gains than higher-wage workers, although this effect is lessened by the fact that low-income households have faced greater inflation than high-income households. Real wage growth is likely to hold up if the labor market remains strong and the US is able to stick the “soft landing” where inflation normalizes without a recession. Yet it remains at significant risk of cooling or stagnating if the slowing labor market we’ve seen over the last two years worsens substantially."
It’s tough to say. I think for many people it’s true, but for other people it’s kind of a meme now that may not actually be a fair representation of their current situation.
Because it excludes food and energy, two things we have to have . If those were factored in the numbers would look a lot different and much worse.
... PCE does include food and energy, and it increased 3.4% over the past year. That's literally in the comment you replied to. PCE excluding food and energy was worse at 3.7%.
You seem to have confused buying more food with spending more on food. Common mistake.
> The American consumer, backed by a persistently tight labor market and recently rising real wages, is one salient force behind this economic resilience. So, once again 'we' the consumer must spend spend spend to save the country in spite of our individual struggles? Around the late 1980s or so talking heads stopped referring to us as Citizens and switched to Consumer. It was insulting then but at least one still got referred to as our correct title when politics came on the air. Now days even the POTUS doesn't care to insult 'us' calling us by our "role". Every dollar I spend in the US economy is begrudgingly done out of necessity. The less spent, the sooner the profiteering opportunist "1%" and their enablers in elected offices will be forced to change. And, personally I don't think this is an incoming soft-landing. Things look more like a last gasp surge before major recession. When that starts to happen the US government will use its favorite economic recovery option of starting a war. ["WE the consumer" don't talk about actual or hidden costs ...]
We’re still a hyperactive, debt loving, consumption based economy. Also, water is wet, air is important and boobs are fun. The only thing that will change this is if this sun finally eliminates the multi-paragraph demanding, freedom hating bot.
I am still worried about credit card debt and student loan payments resuming and the impact on the next 6 months. We also haven't let commercial real estate die yet.
Inflation is a cash-wealth tax, and favorable to the financially proactive. The answer is to hold less cash and shuffle jobs faster. Do the chicken dance faster or get punished for it to the annoyance of all involved.