by Michael Snyder, The Economic Collapse Blog:
If you take an honest look at the numbers, the obvious conclusion is that the U.S. economy is rapidly going in the wrong direction. Delinquency rates are soaring, sales of previously-owned homes have declined by more than 32 percent over the past two years, inflation is starting to rise at a frightening pace again, large companies all over America are laying off workers, and we just witnessed the largest decline in real median household income in more than a decade. Sadly, it is often the most vulnerable members of our society that get hit the hardest when economic times get rough. According to the Census Bureau, the child poverty rate in the United States more than doubled from 2021 to 2022…
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The U.S. poverty rate according to the Supplemental Poverty Measure (SPM) was 12.4% in 2022, a rise of 4.6 percentage points from 2021. The poverty rate for children more than doubled year over year, from 5.2% to 12.4% — a record increase.
There is no way to spin that number to make it look good.
So why did this happen?
The Census Bureau is blaming inflation and the end of emergency programs that were instituted during the early days of the pandemic…
Inflation was a factor, but Census Bureau officials said the spike could largely be attributed to the expiration of pandemic programs: There were no stimulus payments last year, and the enhanced child tax credits expired in 2021.
Those stimulus checks were nice while they lasted, but they also helped to fuel the horrifying inflation that we are experiencing today.
Inflation seemed to cool off a bit for a few months, but now it is starting to accelerate again.
According to the Labor Department, we just witnessed the largest monthly increase in the consumer price index so far this year…
The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.6% in August from the previous month, in line with estimates. It marked the steepest monthly increase this year, underscoring the challenge of taming high inflation.
If prices were to rise 0.6 percent every month, the official rate of inflation would be over 7 percent for the entire year.
Of course if inflation was still measured the way that it was back in 1980, we would still be well into double digit territory right now.
Over the past several years, inflation has been rising much faster than our paychecks have, and this has had an absolutely devastating impact on the middle class.
Millions of U.S. households are being pushed to a financial breaking point, and as a result delinquencies are spiking. The following was recently posted on Twitter by the Kobeissi Letter…
Auto loan delinquency rates are now at their highest levels since 2008.
Since the Fed started raising rates in March 2022, auto loan delinquency rates have nearly doubled.
For Q2 2023, the auto loan delinquency rate in the US jumped to 7.3%.
This is up from 6.9% in Q1 2023 and above pre-pandemic levels.
Moody’s said that auto loan delinquencies will hit 10% in 2024.
Consumers are feeling the pain of higher rates.
Credit card delinquencies are also surging.
In fact, credit card delinquencies haven’t been this high in over a decade.
We really are at a major economic tipping point, and things are going to get even worse as more Americans lose their jobs.
The “largest groundfish company on the East Coast” has just gone belly up, and all of their workers will now be searching for new jobs…
THE largest groundfish company on the East Coast has filed for bankruptcy leaving employees without a job as it shutters all of its locations.
Blue Harvest Fisheries filed for Chapter 7 bankruptcy on Friday, meaning it will most likely have to close and liquidate all of its company assets.
“They weren’t just underwater. It looks like they had long since drowned,” a lawyer who reviewed the company’s court records told the New Bedford Light.
Meanwhile, it is being reported that FedEx will be conducting more layoffs…
Memphis-based FedEx announced Thursday that it would reduce positions in its IT and Finance departments.
FedEx did not disclose the exact number of layoffs or the locations of the positions, but said it was a “small percentage of IT and Finance positions.” The company employs about 30,000 in the greater Memphis area.
And Google just announced that it will be “cutting hundreds of jobs in its global recruiting organization”…
Google is cutting hundreds of jobs in its global recruiting organization as part of a broader pullback in hiring over the next several quarters, CNBC has confirmed.
“We unfortunately need to make a significant reduction to the size of the recruiting organization,” Brian Ong, Google’s recruiting vice president, told employees in a Wednesday video meeting, a recording of which was obtained by CNBC.
If you have a good job that you value, try to hold on to it for as long as you can.
Because the environment that we are heading into will be very harsh.
At this point, even JPMorgan Chase CEO Jamie Dimon is not sounding very optimistic about our economic future…
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