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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

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