The headlines say growth. The households say pressure. The bottom 90 percent of Americans are being squeezed from every direction. The cost of living is up. Debt service is up. Job security is down. Savings are gone. And now the Federal Reserve has revised its 2025 GDP forecast down to 1.4 percent, while inflation expectations have been bumped up to 3 percent. That’s not a soft landing. That’s a stall.
The numbers don’t lie. Real wages have stagnated for most workers. Since 1979, the bottom 90 percent have seen their income share fall from 70 percent to 60 percent. Meanwhile, the top 1 percent has seen their share balloon. The average CEO now earns 344 times what a typical worker makes. That’s not a gap. That’s a canyon.
Debt is eating what’s left. Credit card balances are at record highs. Interest rates are punishing. Rent, insurance, and utilities are swallowing paychecks. Over 50 percent of income for many households is now going to fixed costs. That’s not budgeting. That’s survival.
The labor market is softening. Weekly jobless claims are hovering near 245,000. The unemployment rate is expected to rise to 4.5 percent by year’s end. That’s not catastrophic. But it’s enough to push vulnerable households over the edge. Especially when inflation is still eating into every dollar.
The illusion of growth is breaking. GDP is up, but living standards are down. The M2 money supply is bloated. The Fed’s balance sheet is still above $6.6 trillion. Liquidity is everywhere. But it’s not reaching the people who need it. It’s sitting in reserves. It’s padding asset prices. It’s not paying rent.
Sources:
https://www.bloomberg.com/news/live-blog/2025-06-18/fed-rate-decision-and-powell-news-conference
https://www.cbsnews.com/news/fed-meeting-today-fomc-interest-rate-decision-federal-reserve-june/