Who Ya Gonna Believe, “Them” or Your Own Eyes?
The Covid pandemic and the state and federal response to it caused a number of shocks to the economy. Increased spending, “stimulus” checks, business closures, and quarantines all affected the economy. In my mind all of these caused the economy to “wobble” like a toy top wobbling as its spin slows down.
We’re seeing the wobble still today. Whether the wobble is getting better or getting worse is up to the individual observer.
But to listen to our politicians and the corporate media, everything is fine.
Well, here are some recent stories that tell us that maybe everything is not so rosy. Sorry to be a Dougie Downer, but….
69 percent of all U.S. consumers who live in urban areas are currently living paycheck to paycheck. The rate is 55% in suburban and 32% in rural areas.
According to the intelligence company Morning Consult, 46% of the U.S. population cannot afford a $400 emergency expense.
Tax revenue declines when economic activity slows. Currently federal and state government tax revenues are declining precipitously. In fact, U.S. state and local governments just experienced the worst decline in income tax revenues ever recorded. Federal tax receipts are now at recessionary levels and approaching a 10% decline from last year.
According to the real estate news site Redfin, only 12% of teachers can afford homes close to their schools.
Due to higher interest rates, monthly costs for new homebuyers are almost 20 percent higher than they were a year ago.
Housing affordability now WORSE than it was in 2006 as the average 30-year fixed mortgage rate reaches two-decade high - but property prices aren't coming down.
Packaging Corp. of America reported that cardboard box sales fell 9.8% in the second quarter. That ranks as one of the biggest slumps on record when you combine it with the 12.7% drop in Q1. According to a report by FreightWaves Research, the combined six-month decline ranks as the biggest plunge since early 2009. This is a strong indicator that there are fewer products being packaged for shipment.
In a related area, truck freight volume and spending in the second quarter of 2023 declined by the highest levels since the early days of the pandemic, the latest U.S. Bank Freight Payment Index revealed. Spending by shippers dropped 10.9% compared to the second quarter of 2022 while shipment volume dropped 9%.
According to the World Gold Council, technology demand for gold through the first half of 2023 came in at 140 tons, the weakest since the World Gold Council has tracked the data. This includes the first half of 2020 as governments shut down their economies due to COVID-19. This drop in demand for gold in tech was driven by weak consumer spending on electronics.
Credit card debt has surpassed the one trillion dollar mark for the first time ever as struggling American households increasingly turn to credit cards to get by from month to month. Total credit card balances rose by $45 billion in the April-through-June period, an increase of more than 4% and the highest value in Federal Reserve data going back to 2003.
Credit card delinquency rates are hitting levels that we haven’t seen in more than a decade. Credit card debt 30 or more days late climbed to 7.2% in the second quarter, up from 6.5% in Q1 and the highest rate since the first quarter of 2012.
The nationwide average rent-to-income ratio has been over 30 percent for the past two years. This is the first time in U.S. history that this has ever happened.
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Each of these facts are disturbing enough. But when you look at them in total, it’s hard to believe that things are as good as we’re being told.
So, who ya gonna believe, “them” or your own eyes?
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“Success is not final, failure is not fatal: it is the courage to continue that counts.”
― Winston S. Churchill
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Seen at a Local Church
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