Rising consumer prices, rising unemployment and slowing economic slowdown are signs of stainflys. This is an ugly scenario that develops in front of our eyes. Where people have to do more to do less work. And it is if they do not lose their job.
The Personal Seccor Empendures (PCE) price index, which is a favorite inflation indicator of the Federal Reserve Bank, has recently consumer prices 2.5 % february. Except for food and energy, the PCE price index has increased to 2.8 %per year.
The latest PCE price index does not include the price increase of the Trump tariff. The price increase will come. Moreover, the additional cost of liberation duty will be the most forced consumer price inflation.
For example, 54 %of tariffs are now applied to all products made in China. Therefore, if you shopping at other stores that stockpile shelves with shopping, target, or Chinese goods, you will be able to pay much more.
Of course, consumer prices are always at the worst time. And this time is no exception. Now consumers have been eavesdropping.
Specifically, consumer expenditure has only increased 0.4 % february. Combined with the 0.3 % reduction in January, the weakest two -month stretch has been displayed since the corona virus fierce in 2020.
Consumer spending is more than two -thirds of economic activities. As consumer spending slows, the economy slows down and unemployment increases. Then, if the income is small and the income is low, consumer expenditure will continue to fall. Therefore, self -reinforcement cycles and unemployment rise will be established, where growth is slow or decreasing.
This is a destiny waiting for American workers and consumers. But it shouldn’t be surprising…
Diligence
US consumers have expanded for more than a year. In fact, a survey published by more than 1,000 Americans bank 37 %of them found that they should fall into emergency savings last year. 80 %of them spent money for essential costs. This includes monthly billing, food, water and household goods purchases.
Emergency savings are for emergencies. Something like the repair of the flying head gasket. Or medical expenses for broken arms. Or replace the refrigerator in Fritz. These are the types of unexpected costs that emergency savings are commonly used.
Using emergency savings in everyday bills and buying basic matters such as food and water indicates that something is not right. Another sign is a large amount of credit card in a serious overdue. This is defined as late payment of more than 90 days. Currently, they are usually at the level of the recession.
As the New York Fed reported, Americans now have a record. $ 1 Credit card debt. And in the fourth quarter of 2024 11.35 %. This is the highest credit card delinquency rate since the end of 2011.
In other words, these credit card holders do not pay the minimum monthly value. They do not pay at all. By doing so, they are destroying their ability to borrow in their credit rating and the future.
Consumer price inflation rise, dismissal increase and credit card defaults are approximately storyline. They all point out candy and rapid recession.
#RecessionIndicator
Goldman Sachs Increased predictions 35 %of the possibility of the US economic downturn. The theoretical basis of the investment bank had a tax -like impact on consumers who would come from high tariffs. JPMORGAN should not surpass Increased probability 40 %of the recession for the same reason.
Perhaps this prediction will not recognize the risk of recession. At this point, the probability must be 35 or 40 % or more. In fact, the US economy may already be in the economic downturn.
The latest prediction of 14 economists surveyed by CNBC is in the first quarter of GDP. 0.3 %. It is barely stepping on the water. And this is before Trump’s tariffs begin on the day of liberation.
If this uncertainty related to tariffs and tariffs has the opportunity to filter through price and supply chain, the economy will not be doubtful. After this, if it occurs for the second consecutive quarter, the recession will be formulated.
In the meantime, generation Z and young Millennium generations have posted believers in recession indicators that can be observed on social media. This post tags #RecessionIndicator. Everything from music, fashion and tip culture is posted as evidence of the recession.
“We are fresh with 12 districts 12 dresses.” Mentioned One Gen Z Social Media Contents Creator. “It is made of a nice material. It often doesn’t have to be washed. It’s a recession.”
If Z GEN considers a simple dress as a recession, what will be considered for the steady diet of rice and beans?
When Mom and Dad’s bank went bankrupt
Without doubt, this economic environment was especially cruel to young people. research Saveings.com Recently, half of the parents with adult children have been found to regularly support their descendants. The average support per adult child from “MOM & Dad Bank” is $ 1,474 a month or about $ 18,000 per year.
Parents sacrifice retirement savings to buy food and pay for their cell phone fees and rent or mortgages for adult children. Savings.com:
“The financial burden of supporting adults is especially pressure on parents preparing for nest eggs. Still, parents at manpower donate more than doubled to adult children every month than retirement accounts.”
What will happen when mom and dad retire or lack money to support adult children? Will children be supported by beneficial employment? Will they return their parents after deleting retirement savings?
These are the types of unpleasant questions you need to ask when society decline. If the situation collapses, it no longer functions along the existing line. The established norms and expectations are shattered.
Parents are called for adult children until mom and dad banks go bankrupt. Credit card defaults also accumulate. And in the end, if enough people can’t pay their debts, the entire debt structure will collapse. The bank fails. Bank assets are vaporized.
To reverse the process, the US economy requires lower consumer prices and higher payment. This allows workers and consumers to maintain a reasonable lifestyle without learning debt or relying on mom and dad bank. Trump thinks the tariff is the answer.
then.
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thank you,
Mn Gordon
For economic prism
Mom and Dad came back and broke through the economic prism.
