Why Americans feel gloomy about the economy despite falling inflation and low unemployment
Why Americans feel gloomy about the economy despite falling inflation and low unemployment
Inflation has reached its lowest point in 2 1/2 years. The unemployment rate has stayed below 4% for the longest stretch since the 1960s.
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Someone feel free to explain these two simultaneous headlines-
I'll take a stab. This is all conjecture though so pinch of salt, yada yada. Basically, it's a mix of two or three things.
First, after record breaking inflation in the U.S., the real price of goods/luxuries went up. If everyone bought the exact same thing they bought on black friday last year, we would still have spent more money this year. If you account for our absurd annual inflation this year, "up 7.5%" does not sound very impressive at all.
Second, the economy and general luxury shopping are not necessarily positively correlated. For example, I feel really gloomy about the prospect of ever owning a home. Since I'm just renting, I have more disposable income for luxury shopping. The same could be true for any large purchases like cars, moving out of state, starting businesses, etc. We aren't reinvesting our money in our economic systems as heavily so it follows that we have more spending cash (not a lot more, but I would certainly have less if I had a mortgage right now).
Third, budgetary reasons. If people do have less money then it follows that a spur of the moment purchase like a new TV would not be made so hastily throughout the year. Or even specifically held off on until the annual sale. It could be that we didn't get our usual luxuries and are compensating by getting them at a discounted price. It may also just be emotional spending on ourselves, which many people do as a response to feeling 'gloomy' in a consumer-first culture, despite that actively making the problem worse.
I'd say you're spot on with this, I'd love to see the stats of spending prior to black Friday... betting it was lower than all last years.
Plus people are maxing out debt
Probably this, on the heels of: https://lemmy.world/post/8643298
So spending is probably up, but it's just deepening the debt hole. We'll see where the bottom of that is soon enough...
Since I’m just renting, I have more disposable income for luxury shopping.
I know no one with a lower rent than my mortgage. Literally no one.
Your mortgage isn't an option for me (or any renters) though. I get to choose between current rate+price mortgages and current rent prices. Median rent in my county is $1,250. The cheapest non-manufactured home listed on Zillow in my county with the lowest APR advertised (assuming a credit score of 760+) would have a mortgage payment of $1,642. That's without any of the HOI, taxes, commissions, maintenance, PMI, HOA, or other associated costs.
I likely do, nice to meet you.
I also don't pay taxes, maintenance, or homeowners insurance. I only have to pay to insure my things.
You can argue those costs are baked into my $1250 rent, and you're probably right, but I guarantee it's less than your mortgage and associated costs would be where I live.
The Black Friday article in the picture basically explains the last part of your comment. Everyone waited for sales all year and spent now
People who feel bad buy things to feel better. They might not be able to afford a new house or a car or medical care, but they’ll spend something on gifts.
Also, maybe it’s members of the owning class buying things. They’re getting more money all the time, whether the economy does “good” or not. So they’ve always got money to blow on shit.
Plus it specifically says online sales. Online sales could be up 7.5%, but brick and mortar store sales could be down 50% for all we know.
You can buy a tv for cheaper than a loaf of bread.
Jesus, what kind of bread are you eating?
Only the best ritziest! I saved all year for it.
Sure, no problem. Spending rose by 7.5%, inflation until recent months was at 10%. Net real sales is down by 3.5%. People are spending more for less. This is why we are gloomy. Still, I recognize things are getting better on the macro level.