💰 US economy chat ... econochat!

[lake]

@spoonyfork

he economy is not getting worse and unemployment is at an all-time low.

Consumer buying power is at a 40 year low. Wages have not kept pace with prices.

Whether the economy is getting worse or not, many households are feeling like it is,

Further complicating matters is some major corporations are increasing their profit margins greater than the rate of inflation. Those companies are making higher profits on lower sales and sales revenues.

I often refer to this state of affairs as “hard times” because that is a term not subject to the prejudices of government agencies and economists.

For a portion of the population, who are invested in the casino known as the stock market, these are great times. The profits from the financial services industry affect the numbers that economists base their opinions on.

Since I sell useless items to people who have money, my online business only has problems with the items I sell to people with limited funds.

And of course, I do not sell any cheap Chinese crud. But I buy some for my own use, and the Chinese economy is worse off than ours, so prices are down.

Years ago, when Taiwan was the source of many cheap imports. I wanted to private label product for my computer business. I got quotes from Taiwanese suppliers. The landed cost of product was higher than what I could pay in the US to large importers from Taiwan.

I developed a relationship with an importer in NYC and got faster delivery at lower cost with a level of consistency you might not get today from some jobber selling on Alibaba.

I suspect there are still some big importers who one could seek out and deal with.

A big problem with imported goods is the lack of any real relationship with or knowledge of your suppliers. The people I know who have had success with imported goods have an employees or a relative in the country the product comes from.

[spoonyfork]

Wages have outpaced inflation for the last 12 months in a row.

In June, prices dropped for the first time since the pandemic.

Other countries are in recession; the US is not.

Stock market just hit another high yesterday.

The economy is not getting worse by any measure.

[Tried_Tested]

There are a few assumptions that need revisiting. Stock market is not the real economy. The stock market is being carried by a few tech stocks and speculation is at an all time high. Credit defaults are at all time high. 401k plan hardship withdrawals have seen a %x increase just last month.

As far as the stocks go, you can compare the S&P500 (weighted to marketcap) vs the Equal weight S&P500 (weighted equally).

To address your deflation point:

a. Value of money increases but that encourages savings over spending just the opposite of inflation and that’s an economy issue.

b. The prices of sticky of sticky goods/services doesn’t follow the deflationation reduction of prices as demand goes down - so while oil has gone down visibly - Education, Healthcare, Utilities, Insurance Premiums have all steadily gone up and they don’t historically come down - adding additional burdens.

c. Yes those making a killing in the market are doing well, but that is not the majority of the country.

As far as the unemployment rate goes: It is the rate of change that makes all the difference - not the actual unemployment rate. This does not address the myriad issues surrounding employment like structural vs cyclical unemployment, labor force participation rate, type/quality of jobs, wage growth, duration etc

I believe we went from ~2% up to +10% unemployment down to 4% - folks see this as good, but that +2% is superbly problematic.

Finally, most people are stuck with old stats, our GDP was ~+2% last year but is now ~1.5% whereas Canada was ~3.5% and has crawled to less than ~0.5% - things are not good.

The economy is already worse and there is nothing anyone can do to change it - unless the AI mania actually makes money and sets things right. But even the largest of them are not making squat at the moment. Sam Altman was very serious when he said they would depend on AI to develop a profitable business model - much to the chagrin of the crowd he was speaking to.

There is a real hurt coming. No one has a crystal ball to predict exactly when but its coming or gravity doesn’t exist.

[Dogtamer]

@spoonyfork

Wages have outpaced inflation for the last 12 months in a row.

In June, prices dropped for the first time since the pandemic.

Other countries are in recession; the US is not.

Stock market just hit another high yesterday.

The economy is not getting worse by any measure.

@Tried_Tested

…
There are a few assumptions that need revisiting. Stock market is not the real economy. The stock market is being carried by a few tech stocks and speculation is at an all time high. Credit defaults are at all time high. 401k plan hardship withdrawals have seen a %x increase just last month.
…

@Tried_Tested

…
There is a real hurt coming.
No one has a crystal ball to predict exactly when - but it’s coming or gravity doesn’t exist.

[lake]

@spoonyfork

Wages have outpaced inflation for the last 12 months in a row.

So what. Wages have not outpaced inflation by enough to make up for past inflation and will not for years.

Other countries are in recession because they have governments which are similar in goals to our government and are not the world’s reserve currency.

The politcal stresses in those countries mirror the divide in this country.

And as I pointed out the stock market is a casino. I make more in the market in a day than I make online in a year, The percentage of people iin the market is not growing. The percentage of people with debt and no savings is growing.

The economy is an aggregate message of how the economy is doing and wealth is not equally distributed and should not be. But so long as the middle class is doing poorly it is hard times.

I am not in the top 1% but I am within the top 10% and I know many who are in the middle and hurting badly. Those people who are hurting have votes and will vote for someone who offers them hope.

I have ridden out recessions, I will ride out these hard times, and I will not feel any pain. If you choose to be blind to those feeling pain, that is your loss.

There is a lot of pain in this country.

[HumbleWarrior]

@spoonyfork

The economy is not getting worse and unemployment is at an all-time low.

Hmm… not sure whether you’re talking about the unemployment of US or other countries. The US unemployment rate has been going up lately. Lots of lay off since the Fed began hike up the interest rate. See the chart below:

Also, the unemployment number is calculated in the way to make economy appear better than reality. After 6 months, it stops including people who lost the job. The calculation assumes that 100% of people got a new job after 6 months. That’s a huge flaw. Some experts suggested to use the numbers from giant payroll companies such as ADP to get a way more accurate of the employment but the government refused to do it.

[HumbleWarrior]

@Tried_Tested

Stock market is not the real economy

You’re definitely right. If the stock market was the real economy, Venezuela would have had the best economy in the world because they have the best performing stock market. See the chart below:

@Tried_Tested

so while oil has gone down visibly - Education, Healthcare, Utilities, Insurance Premiums have all steadily gone up and they don’t historically come down

Yup, you were right again. Utilities and insurance premium have gone up way more than the fed official inflation number.

@Tried_Tested

type/quality of jobs

Yeah, many people lost their 1 good job and had to get 2 part time jobs (that the combined income of 2 jobs is still less than the income from 1 good job).

[spoonyfork]

Stock market is part of the equation and it’s moving in the right direction. I mentioned other indicators as well.

To say the economy is getting worse is just not true. To say that inflation is outpacing wages is not true.

All I know is that nothing was worse than 2020, but thankfully my Obamacare subsidies kicked in to get me throught that rough patch

But yeah, it’s coming…a recession…there is ALWAYS a recession coming. Just isn’t happening now nor in the near future.

[spoonyfork]

I am not aware of anyone that has had to take numerous jobs, etc. Everyone I know is doing just fine, can afford to do the things they always have, etc. But with the strong jobs market, it is no wonder some people are taking advantage of the opportunities we now have.

It always amuses me that when a Dem is in office, everybody wants to use different measurements than the ones used for decades. “Yeah unemployment is really low but everyone is working 3 jobs,” is never mentioned when the other team is in office and has low unemployment numbers. Just remember, the last guy left office with fewer employed Americans than when he started, insurrections and felonies aside.

The doom and gloom crowd keeps pushing this “sky is falling” but it just isn’t reality.

[lake]

Here is some real economy which affects real people.

https://www.wsj.com/economy/housing/evictions-surge-in-major-cities-in-the-american-sunbelt-7da0406d?st=sa0ns9xs23c1r2j&reflink=desktopwebshare_permalink

Eviction filings over the past year in a half-dozen cities and surrounding metropolitan areas are up 35% or more compared with pre-2020 norms,

People are evicted because they cannot pay their rent,

Are some of those people no longer buying on Amazon or online?

Another curious phenomena. The job creation numbers are revised down with regularity once the press is no longer interested in reporting them. I assume the unemployment rate should be also, but amazingly I have not seen any evidence that it is.

[VTR]

@spoonyfork

To say that inflation is outpacing wages is not true.

And to label all inflation the same is also not correct.
Corporate greed in the form of shrinkflation and other bad behavior, while in the end is “inflation”, it is by no means tied to the standards applied outside of their respective oligopoly/monopolistic markets. In many cases it is unnecessary and just plain greed due to lack of competition.

Another example was fast food with the minimum wage increases.

Let's talk about normal people economy news....

[Tried_Tested]

I’m Mr. Right but I’m also sad.

T_T

[Tried_Tested]

awwh shucks, that curious george hat is endearing

[papy]

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[ModernSwitch]

It’s the little things that help people form their opinions on what the economy is doing. I don’t care if the stock market is up or down, I don’t care if unemployment is at an all time high or low or which means what.

It’s the disgusting feeling I get when I walk into a store that a year ago an 18oz box of cereal was $3.99 and now it’s turned into a 16oz box of cereal for $5.99.

When I walk into target, they have started locking everything up. Socks, underwear, laundry detergent, toothpaste. I don’t live in a bad area either. The high ups have decided they would rather inconvenience those who are spending money than let theft get out of control. But people who steal are going to steal and if it’s locked up they will just steal what’s not locked up.

Would not surprise me if some stores with high theft rates get 100 percent locked down. A Walmart near me that just remodeled its parking lot to have 40+ online pickup parking spots. That’s extreme overkill and also inconvenience to your current shoppers who want close parking. The stores know something bad is coming so why not be prepared?

The next generation isn’t driving. I remember being in highschool and a parking spot pass was a lottery. There were not enough empty spots for everyone who wanted to drive. My oldest is in highschool now…and the lots are more than half empty. The next generation doesn’t have access to affordable cars like my generation did.

I’m still amazed everyday people are willing to spend money on light switch covers

[Lost_My_Marbles]

@ModernSwitch

I’m still amazed everyday people are willing to spend money on light switch covers

Fizzed hair is kinda out of style …

[TJB]

I agree with you up to the point of driving. I don’t think it’s access to affordable cars, it’s too much time on mobiles and social media.

When we (I’m assuming most of us are older) were younger, we spent all out time out and about. Even as little kids, we were outside playing with friends pretty much from dusk to dawn (excluding lunch and dinner of course). Punishment was having to stay home.

Now, kids (not all, but most of them that I know) prefer to sit at home playing video games or staring at their phones. Even if they do go out, they sit together with their eyes glued to their phone. What’s the point of getting a car and a license if you prefer to sit at home?

My step son graduated high school this summer. We gave him my wife’s old car and bought her something new when he was close to getting his license. Even after getting his license (which we forced him to do), he never left the house other than school, part time job and violin lessons. Even today he hasn’t taken a single road trip outside of our small town.

My nephew is in high school now. His parents bought him a new car before he even had his license. They were thinking that was an incentive to go get his license and get out of the house. Nope. Even after he got his license (which they forced him to do), he still expected his parents to drive him to school. He isn’t an outlier either, he is just like his friends that have no motivation to take steps into adulthood.

It absolutely is a generational thing but I don’t see it as money related, it’s a very different culture than what us old folks grew up with.

[VTR]

@ModernSwitch

The next generation isn’t driving.

Uh it’s time for the previous generation to stop driving. My mom is now 1 door panel, and two bumpers into her subaru in the last 2 years. Car companies came up with autonomous driving and driver assist, for her generation, not my kids.

[VTR]

@ModernSwitch

The high ups have decided they would rather inconvenience those who are spending money than let theft get out of control.

This is also a generational shift. We/they have a rule at the Omaha office that if someone answers a phone during a conversation, its okay to leave the room and take a dump, get a snickers or do anything but help them for a while.
I don’t work there per-se but I saw this happen when a younger man was asking a few questions and then put a finger up and answered his phone.
The sales rep turned to another farmer, and proceeded to make the phone call guy wait about 15 minutes to get back to him, going out of his way to hand pull the order for the other customer, despite having warehouse staff present to pull it. You get the picture by now.
We had a similar policy in the 90s in auto repair, the person in front of you is spending money, the person on the phone is wasting it, so we treated them accordingly when both are vying for your service.
I do see some consumers point though. With a little planning I can order stuff from Amazon for a little bit more money but not get shot at Wal Mart. It is an introverts dream world.