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The U.S. economy continues to stumble, and while it’s doing better than expected at the macro level, it’s hurting working Americans at the micro level.
Despite October’s numbers beating Wall Street expectations, inflation remains serious. Interest rates are near record highs, the housing market is in disaster and credit card debt is at an all-time high.
Yet, for some reason, the Biden administration continues to promote Bidennomics and give speeches touting the strength of the economy. But that doesn’t resonate with voters.
A recent poll found that just 2% of voters in the six battleground states said the economy was doing well. More than half of voters under 30, Hispanics, women and people in all income groups say they trust former President Trump to have more control over the economy than Biden. ”
Inflation remains above the Fed’s target of 2.0%.
According to the U.S. Bureau of Labor Statistics, the most common measure of inflation, the Consumer Price Index (CPI), rose 3.2% in October 2023 compared to September 2022. Meanwhile, core CPI, which excludes more volatile variables such as fuel and food, was 4% higher. What’s lost in most of the financial TV talk is that his CPI in October 2022 was 7.7%. This means that today’s price is nearly 11% higher than in 2021. This is lost on buzzy TV, but it really isn’t. Let’s not forget the working Americans who are trying to put food on the table and gas on the trucks.
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Given high inflation and declining real wage rates, “the Bureau of Economic Analysis recently revised its previous estimates to show that household disposable income is lower and personal consumption is higher than previously reported.”
During President Biden’s term, American households lost $7,000 in spending power. This is a huge loss considering the average American family’s annual income is his $71,000. That’s probably why so-called experts are predicting a weak holiday season, according to CNBC. People don’t have money to spend on holiday gifts.
More importantly, people are having to dip into their savings and retirement funds to pay for basic necessities. Almost 33% of Americans have less than $100 in their savings account. Only 40% of Americans can afford a $1,000 emergency expense. Emergency withdrawals from 401Ks increased by 27% this year.
Biden comes under fire for claiming to see economy ‘through Scranton’s eyes’
Additionally, credit card debt has reached record levels, exceeding $1 trillion. According to a recent study by Clever Real Estate, “3 in 5 Americans (61%) have credit card debt, owing an average of $5,875. Additionally, 23% pay off their credit card debt each month. 14% said they are going deeper into debt, with 14% missing payments in 2023. ”
People don’t go into debt to go on vacation or buy a new TV. They take on credit card debt to buy necessities like groceries, pay rent and utilities.
Credit card debt isn’t the only thing holding the economy down. The housing market is in a slump. Home builder sentiment is at a 10-month low as mortgage interest rates approach 8.0%.
Housing prices are stable due to inventory shortages. People whose mortgage is less than 4% cannot sell. The only reason we haven’t seen a housing market collapse is because Americans have learned their lessons from the 2008 housing collapse, and the number of adjustable rate mortgages is negligible, and the number of mortgage applications in the last week of October That’s only 9.2%.
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However, more and more people are canceling their home purchase contracts. The home purchase cancellation rate reached 16.3% in September, equivalent to 53,000 contract cancellations.
Meanwhile, the number of home foreclosures is up 34% from a year ago, with more than 150,000 homes undergoing some form of foreclosure in the last quarter. It’s not just housing and credit cards. The number of car pickups is now up over 20%.
President Biden may continue to run for re-election on the strength of Bidennomics. But the American people are hurting and working harder than ever to move further and further backwards.
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