9 Signs The Consumer Is About To Break

foreign hope you're doing well got a great story it's out of Zero Hedge and it's entitled nine signs that the U.S consumer is about to break and that is an understatement because this time when the consumer breaks it'll make 2007 2008 look like a cakewalk it says here when the U.S consumer is in a healthy Financial shape the outlook for the U.S economy is generally positive but just like we witnessed prior to the Great Recession of 2008 and 2009 when the U.S consumer is not in healthy Financial shape bad things tend to happen unfortunately the numbers are telling us that the current conditions are eerily similar to what we experienced during the run-up of the Great Recession households do not have enough money coming in debt levels are soaring and delinquency rates are rising and the tens of millions of us are just barely scraping by from month to month says following are nine signs that the U.S consumer is about to break number one after adjusting for inflation in taxes household income in the United States has fallen nine point one percent since April of 2020. on the inflation issue household income adjusted for inflation and taxes is running some 9.1 percent below where it was in April of 2020 putting additional pressures on consumers according to SMB Nico Securities number two credit card debt has surpassed the one trillion dollar Mark for the first time ever the New York Federal Reserve reported on Tuesday total credit card indebtedness Rose by 45 billion in the April through June period an increase of more than four percent that took the total amount owed from 1.03 trillion the highest gross value in fed data going back to 2003. the number three the average rate of interest on credit card balances is now over 20 percent and that is financially crippling millions of our fellow citizens the average credit card charges a near record 20.53 interest rate according to bank rate number four credit card delinquency rates are hitting levels we haven't seen in more than a decade the fed's measure of credit card debt 30 or more days late climbed to 7.2 percent in the second quarter which is up from 6.5 percent in quarter one and the highest rate since the first quarter of 2012. though close to the long run normal Central Bank officials said total debt delinquency edged higher to 3.18 from 3 percent number five reason why the U.S consumer is about to break the number of Americans that are making emergency withdrawals from their 401K plans is absolutely surging the more more Americans are tapping their 401K accounts because of financial distress according to Bank of America data released Tuesday the number of people who made a hardship withdrawal during the second quarter surged from the first three months of the year to 15 950 an increase of 36 percent from the second quarter of 2022. according to the Bank of America analysts of clients employees benefits program which are comprised of more than 4 million planned participants number six over the past year it has become much more expensive to purchase a home elevated mortgage rates and sales prices mean owing a home is about 20 percent more expensive than it was last year the typical U.S home buyers monthly mortgage payment was twenty six hundred and five dollars during the four weeks ending July 30th which is down 32 dollars from July's record high but up 19 from a year prior according to a Friday report from real estate listing company Redfin number seven the Nationwide average rent to income ratio has been over 30 percent for the past two years this is the first time in history that this has ever happened remember that phrase when you start seeing things not only this is bad as the shutdown of 2020 or this is as bad or worse than 2008 great financial recession and now you're seeing numbers that have never happened ever credit card debt Rising national average rent to income ratio has never been as high you know that we are in for a serious serious crash number eight the number eight reason why the consumer is about to be tapped Out done it is being reported that vehicle repair costs have gone up by almost 20 percent over the past year car repair cars costs are almost 20 percent in the PA have gone up 20 in the past year according to the Consumer Price Index more than six times the national inflation rate and among the largest annual price increases of any household good or service you are seeing hyperinflation in car repair costs right now we are about to experience a hyperinflation in food and in energy and you are going to be amazed in 2024 what you see with those prices going up it's a combination of factors that are causing these prices to go up experts say some emerged in the pandemic era While others are longer term Trends in the auto market number nine the final reason why the U.S consumer is about to be completely destroyed done it's over for them a whopping 69 of all U.S consumers that live in urban areas are currently living paycheck to paycheck 69 percent of consumers in urban areas live paycheck to paycheck which is 25 more than their Suburban counterparts 55 of whom live paycheck to paycheck additionally 63 of rural consumers reported living paycheck to paycheck these Regional concentrations of paycheck to paycheck consumers could be attributed to the high percentage of Millennials living in urban areas 48 as well as the large share of Baby Boomers in seniors many of whom are retired and are living on a fixed income living in rural areas makes up 32 percent after seeing all those numbers is there anyone out there that still wishes to argue at the average U.S consumer or if they're in good shape type one if you believe the consumer is done for put a fork in it they're over type number two if you think there's still room to go the truth is that economic conditions are rough and they are deteriorating a little bit more with each passing day on Tuesdays on Tuesday Moody's decided to downgrade ratings for 10 different U.S banks type 3 if you believe that U.S banks are headed towards a much bigger crash this year in 2023 I personally believe that they are says and they are warning that more downgrades may be coming U.S Bank stocks declined as after Moody's investors uh sorry after Moody's investor service lowered its rating for 10 small and mid-sized lenders and said it may downgrade major firms including U.S Bancorp Bank of New York melon Corp State Street Corp and truest Financial Corp higher funding costs potential regular regulatory Capital weakness and Rising risks tied to commercial real estate are among strains prompting the review of Moody's said late Monday and Tyson Foods has just announced that it will be shutting down four more four more chicken plants this is the largest producer of meat in the country this is not a joke the meat processor which supplies about a fifth of the beef pork and chicken in the United States said Monday that it is shutting down four chicken plants two in Missouri Missouri one in Indiana and one in Arkansas following declining declining chicken Revenue the arkansas-based company previously announced two separate closures in the spring we have already seen the consumer go from beef to Pork to chicken because of the lack of money in their homes we are seeing all kinds of things going up day by day and we are seeing right now the consumer being completely tapped out toward the point that they can't even afford chicken causing companies like Tyson to close their doors but despite everything that has already happened fed officials are telling us that multiple raid hikes may still be necessary is this some kind of sick joke no it's not you see the truth is that what most uh people do not understand 99 of the population that is is that the US dollar is losing its Reserve currency status and countries are wanting to adopt dump the dollar as fast as they can but they're doing it in a way that it does not cause the dollar to lose too much value all at once we've already seen the US dollar lose value against the Euro the British pound and other currencies in the last year the reason why is because there are more sellers than there are buyers the Federal Reserve knows this so they are not only fighting a deal a fight of inflation on in our country's borders they're dealing with a fight that they're trying to give countries and governments their central banks a reason any reason at all to hold that dollar so how do you do that you raise interest rates I'm telling you right now I've said this before and I'm saying again the Federal Reserves was not done raising rates the question is what will happen to your Investments as rates keep getting higher I hope you have a great day thank you to everybody that shares these videos the economic Ninja is out

Channel: The Economic Ninja

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Id: kAECLQw-Xd8

Length: 10min 50sec (650 seconds)

Published: Fri Aug 11 2023