Americans struggle with debt and spending amid pandemic, racking up record debt. Loose fiscal policy will lead to a resurgence of inflation and make Powell’s job much tougher.

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Americans got used to spending big during the pandemic. Now they’re running out of money and racking up record credit card debt.

“Credit card debt has reached record highs after years of pandemic-era spending.
Credit card debt fell after the start of the pandemic but has consistently risen since mid-2021.
This data comes as inflation falls and the labor market remains strong.

Americans’ cash reserves have experienced a boom bust cycle in the last few years, and the latest data spells bad news.

Americans now hold a record level of credit card debt, according to recent data from the Federal Reserve. It comes as they see their pandemic savings and cushions depleted, and as the labor market cools from its red-hot post-vaccine highs.

It shows just how much direct stimulus spending bolstered the economy and created a group of workers accustomed to support that likely won’t come back — and it may spell even further economic doom as student loan bills get piled on.

This data all shows a disconnect between Americans running out of money and the broader economy. Even with wages trending higher, inflation coming down, and GDP expected to grow for the quarter, many Americans are still struggling to pay down their bills and maintain savings. Consumer confidence levels are at two-year highs, but paying off credit card debt remains a continued stressor.

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If the pandemic was a great economic reckoning, and the year or so after marked by workers demanding better, the latest iteration of the economy might be best described as grumpy: Even strong economic data isn’t enough to keep Americans above water. After all, a strong jobs report or growing GDP can’t be cashed in when you’re paying for inflation-driven markups at the grocery store.”

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