Signs of recession?
The U.S. Bureau of Labor Statistics reports that inflation in the U.S. was 7.1% in November, 2022
- Consumer price index of 7.1%
- Eggs up 49% in past year
- Airline fares up 36%
- Milk up 14.7%
- Electricity up 13.7%
- Groceries up 12%
- Chicken up 12%
- Baby food up 10.9%
- MSN MarketWatch reports that:
- $6.8 trillion in wealth has been lost by American households in 2022
- 25% of stock market value has been lost this year
- Nominal net worth fell 4.6%
- Market value of assets fell by $6 trillion
- Liabilities rose by $900 billion
- Real household debt up 4.3%
- Personal savings rate has fallen to 3.7% of disposable income
- November retail sales were down 0.6% YoY
- 2.6% decline in auto sales
- 2.6% decline in furniture sales
- 1.5% decline at electronics and appliance stores
- 2.5% decline at home improvement stores
- 2.9% decline at department stores
- The Federal Reserve announced another 0.5 percentage point interest rate increase
- Brings interests rates to 15 year high
- Fed Chair Jerome Powell said “there is still a long way to go in the fight against inflation”
- “I would not see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way”
- Observers anticipate rates to continue increasing in 2023
- Factory production dropped 0.6% in November
- Fed predicts that the U.S. economy will only grow 0.5% in 2023
- Also projects that unemployment rate will increase in 2023
- LendingClub published data on finances of Americans in 2022
- 63% are living paycheck to paycheck in November, up 60% due to inflation
- 47% of those earning more than $100K/year are living paycheck to paycheck, up 43%
- 401K “hardship” withdrawals hit record high
- Real average hourly earnings are down 1.9%
- Credit card balances up 15%
- Credit card rates are now more than 19% on average, an all-time high
- 32% are saving less than before
- 50% of those “struggling” have no savings at all
- 33% feel uncomfortable about ability to pay an emergency $400 expense
- 8% would not be able to afford
- 63% are living paycheck to paycheck in November, up 60% due to inflation