With the median mortgage payment exceeding the cost of rent by $1,000 per month and average new car payments and used car loan interest rates reaching new highs, households are feeling the strain of increasing expenses. The milestone of $1 trillion in credit card debt, coupled with record-high interest rates of 25%, underscores the growing financial burdens that ordinary Americans are facing, making it increasingly difficult to afford fundamental needs in today’s economy.
Housing market affordability has been hitting new lows almost daily for over a year.
Simply waiting for conditions to improve may take years.
What are first time homebuyers doing in these market conditions?
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) September 29, 2023
You can’t make this up:
1. Median Mortgage Payment: $2,900
2. Median Rent Price: $1,900
It now costs ~$1,000/month more to buy a house than to rent.
Meanwhile, the average new car payment is now at $750/month.
The average interest rate on a used car loan just hit a record…
— The Kobeissi Letter (@KobeissiLetter) September 29, 2023
Tipping at full-service restaurants fell to 19.4% in the second quarter of 2023, the lowest since November 2019, per CNBC.
— unusual_whales (@unusual_whales) September 29, 2023
The percentage of American adults who always leave a tip is on the decline, per Bloomberg: pic.twitter.com/79FDjfLRvJ
— unusual_whales (@unusual_whales) September 29, 2023
Price increases in last year: 🔥🔥🔥
Do you believe the government when they claim inflation is back under 4%? pic.twitter.com/LLUpajVgbC
— Wall Street Silver (@WallStreetSilv) September 28, 2023
Personal Income Fails to Keep Up With Spending For Three Months
The BEA’s Personal Income and Outlays report for August shows a surge in inflation and spending but income doesn’t keep up.
Income, Spending, and Inflation Notes
- Chained dollars mean inflation adjusted by the PCE price index, not the CPI
- Real (inflation-adjusted) income fell for the second straight month meaning wages have not kept up with inflation.
- The PCE price index jumped 0.4 percent in August and is up 3.5 percent from a year ago.
- Excluding food and energy, the PCE price index rose 0.1 percent and is up 3.9 percent from a year ago.
In nominal terms, consumer spending is on a rampage. For the last three months, income was up 0.1%, 0.0%, and 0.2% while spending rose 0.4%, 0.9%, and 0.4%.
Disposable Personal Income Three Ways Percent Change
Spending Rampage
Real Income and Spending Billions of Chained Dollars
