Amidst plummeting real GDP and soaring inflation, Americans face a grim reality of diminishing purchasing power and rising debt burdens. As savings rates hit record lows and credit card delinquencies soar, the economic strain becomes increasingly palpable, sparking concerns over financial stability and future prospects.
I don’t know who needs to hear this but real GDP is crashing…..extreme higher prices is not a good economy it’s just us becoming poorer thanks to Biden printing trillions. pic.twitter.com/UGEwFZIkjf
— Golden Coast (Cassandra) (@GregCrennan) April 25, 2024
There isn’t a single asset class that is currently above its inflation adjusted highs from 2021.
Let that sink in.
— Michael A. Gayed, CFA (@leadlagreport) April 25, 2024
This is going to breed resentment.
Picture a 35-year-old couple, 2nd baby just born, can't keep waiting for interest rates to decline. They're in at $2,843 per month. Next door neighbor, also 35, also 2 kids, same household income, house looks just like theirs, in for $1,400. pic.twitter.com/R3zM6TQY3w
— Jeff Weniger (@JeffWeniger) April 25, 2024
JUST IN: Savings rates in the US fall from 3.5% to 3.2%, the lowest since November 2022, according to Zerohedge.
Over the last year, savings rates have fallen from 5.2% to 3.2%.
All as credit card debt continues to push above a record $1.1 trillion with 25%+ interest rates.… pic.twitter.com/lXJxW4oBsl
— The Kobeissi Letter (@KobeissiLetter) April 26, 2024
Also, US credit card delinquency rates in Q4 23 were the worst on record.
~3.5% of card balances were at least 30 days past due
Credit card serious delinquency rates (90+ days) are rising at the fastest pace since the Great Financial Crisis. Read more👇t.co/ivOy8TbtHR
— Global Markets Investor (@GlobalMktObserv) April 26, 2024
Core Fed Inflation Metric Surpasses Expectations, Rising 2.8% in March
Inflation persisted in March, as revealed by the Federal Reserve’s closely monitored personal consumption expenditures (PCE) price index. Excluding food and energy, the core PCE index rose by 2.8% year-over-year, surpassing the anticipated 2.7%, according to the Commerce Department. Including these volatile categories, the overall PCE index also exceeded expectations, climbing 2.7% compared to a forecasted 2.6%. Despite these figures indicating sustained inflationary pressure, market response was muted, with Treasury yields dipping slightly and Wall Street poised for a positive open.
Economic Slowdown and Rising Inflation Cast Doubt on Soft-Landing Prospects
The U.S. economy experienced its slowest growth in nearly two years last quarter, accompanied by a notable increase in inflation, which dampened hopes for a soft landing. The Bureau of Economic Analysis reported that the Gross Domestic Product (GDP) grew at an annualized rate of 1.6%, falling below all economists’ forecasts. The primary driver of economic growth, personal spending, increased at a modest 2.5% rate, which was less than expected. Additionally, a widening trade deficit contributed to the slowdown, marking the largest subtraction from growth since 2022. Inflation also showed signs of acceleration, with a key indicator rising at a 3.7% annualized rate. This was the first quarterly increase in a year, indicating that price pressures are resurfacing.