US Economy, part 2

[jesmu84]

https://www.nationaltruecostofliving.org/research/pressrelease

Sixty-five percent of Americans often considered "middle class" – those earning more than 200 percent of the federal poverty level (FPL) – are struggling financially today and don't expect that to change for the remainder of their lives

the poll found that 40 percent of ALL Americans are unable to plan beyond their next paycheck, and 46 percent don't have $500 saved for a rainy day.

Meanwhile, by traditional measures, the American economy is incredibly strong, adding jobs much faster than most experts predicted, with U.S. gross domestic product (GDP) also growing at a world-beating pace. This disconnect goes a long way to explain Americans' pessimistic attitude about the health of the national economy, while underscoring the gap in our nation's ability to measure economic wellbeing in 21st-century America.

I tried to find more information about the details/data/stats behind the poll, but was unable.

[Skatastrophy]

These numbers are pretty stable in surveys regardless of the economy. About 50% of Americans can't afford a $500 emergency or 70% of Americans living paycheck to paycheck. People in America are bad with money.

Let's ignore that survey data is unreliable at best.

[lawdog77]

These numbers are pretty stable in surveys regardless of the economy. About 50% of Americans can't afford a $500 emergency or 70% of Americans living paycheck to paycheck. People in America are bad with money.

Let's ignore that survey data is unreliable at best.

I call BS on this, Americans being bad with money is not the primary reason. Easy for you to say.
Family of 4-200% FPL is 60K-
5K a month-lets say 3500 after taxes
Looked in my town- a 3 bedroom apartment runs almost 2K a month.
Car- 500 a month
Food- 1000/month
Utilities
Insurance
Clothing
School incidentals

God forbid, one has to go to the doctor.
https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/#Share%20of%20adults%20with%20medical%20debt,%20by%20health%20status%20and%20income,%202021

Where do you expect the savings to come from?

[jesmu84]

These numbers are pretty stable in surveys regardless of the economy. About 50% of Americans can't afford a $500 emergency or 70% of Americans living paycheck to paycheck. People in America are bad with money.

Let's ignore that survey data is unreliable at best.

Silly statement.

[Jockey]

Lots of people in America ARE bad with their money.

I've known many struggling people who think nothing of spending $100+ for alcohol and cigarettes every week.

[lawdog77]

Lots of people in America ARE bad with their money.

I've known many struggling people who think nothing of spending $100+ for alcohol and cigarettes every week.

Addiction/self medication is a thing

[Uncle Rico]

Lots of people in America ARE bad with their money.

I've known many struggling people who think nothing of spending $100+ for alcohol and cigarettes every week.

It's hard to quantify because I suspect a lot of Americans think they're good with their money when they absolutely are not.

I tend to agree a lot of Americans are terrible with money and it's probably more than most people think.

[tower912]

Many Americans think they are good drivers and fast golfers.

[lawdog77]

Many Americans think they are good drivers and fast golfers.

Many Americans also think they know how the other half lives

[MU82]

Many Americans are bad with their money.

Many Americans, including both those who are bad with their money and good with their money, are struggling.

Both are true.

Hell, I've been bad with money, I've been good with money, I've struggled, I've overcome my badness with money to get decent with money, I've flourished. All within about a 20-year stretch. And I'm guessing that many others here can say the exact same thing.

[tower912]

I remember shooting victims telling me to cancel the ambulance, as they could not afford an ER trip.    3 families in a 1200 sq foot house heating it with the stove and a space heater.   Cockroaches climbing up walls in broad daylight.   Listening to a kid the age of my child telling his dad (my age) to keep fighting while we were doing CPR on him.    Hoarder houses.   Apartments with a dozen formerly homeless men taking advantage of the fact that one of their comrades had actually got an apartment and now they all had somewhere to stay for the winter.  Great-grandmothers taking care of multiple generations due to absent parents.

I agree.  A lot of people don't understand how the other half lives.

[MU82]

From the NYT's DealBook newsletter:

Tomorrow is a big day for the European Central Bank. It is widely expected to lower interest rates by a quarter percentage point, its first cut since 2019 — and outpace the Fed in lowering borrowing costs. Investors will watch to see how that would influence monetary policy beyond Brussels, as well as its effect on global trade, stock markets and the dollar.

The big questions on our mind: Will Christine Lagarde, the central bank's president, signal further cuts at its July and September meetings? And how far can the E.C.B. go if the Fed stays put?

The good news: Economists say the era of elevated rates around the world is coming to an end. But they add that sticky inflation will tie central bankers' hands, limiting their ability to lower borrowing costs much.

Policymakers are most likely entering a "shallower for shorter" phase, Holger Schmieding, an economist at Berenberg Bank, told DealBook, in which the cuts are staggered and rates remain above prepandemic levels.

The E.C.B. is considered a step ahead of the Fed. The futures market this morning sees one Fed rate cut before Election Day, probably in September. That said, those odds could change if Friday's jobs report brings any surprises.

Watch the dollar and stocks. A rate cut by the E.C.B. would most likely push the dollar higher against the euro. That could be good news for European exporters like Airbus and automakers.

The same phenomenon could influence global investment flows. "In a scenario where the E.C.B. is cutting, and the Fed is not, this is likely to be positive for European equities and could see a period in which they outperform the U.S. S&P 500," Dan McCormack, the head of research at the Macquarie Group, told DealBook.

The Fed remains another wild card. The U.S. economy has been robust, creating an inflation risk that has scrambled the Fed's rate-cutting timeline. The longer the Fed leaves its rates unchanged, the more that could weigh on other central bankers who are worried that diverging policies would push up the dollar — and domestic inflation.

"The key question is how much can the E.C.B. deviate from the Fed, particularly if inflation remains sticky," said Mohit Kumar, an economist and strategist at Jefferies. "In a scenario where the Fed doesn't cut rates at all this year we see," the E.C.B. making two rate cuts this year instead of three, he said.

[lawdog77]

Available jobs decreasing
https://www.cnn.com/2024/06/04/economy/job-openings-quits-jolts-april/index.html

[MU82]

Available jobs decreasing
https://www.cnn.com/2024/06/04/economy/job-openings-quits-jolts-april/index.html

Yep. And that's why the market reversed yesterday. Bad news = good news because of an increased possibility of a rate cut.

[Goose]

IMO, there is a faction of the population that were fortunate to see big paper gains in their net worth over the past decade and either think they are smart or have little empathy for the segment that did not see big increases in their net worth. Making money in the real world is hard and seeing 50+% uptick in housing prices and big stock market gains has been a bonus for many of us.

As for savings, I remember a wise business mentor saying to me "you don't think a $100K is a lot of many, then try and save it". For people having limited savings accounts, it is not completely because they are bad with money. I truly feel for the people that are doing the right things and still struggling.

[The Lens]

IMO, there is a faction of the population that were fortunate to see big paper gains in their net worth over the past decade and either think they are smart or have little empathy for the segment that did not see big increases in their net worth. Making money in the real world is hard and seeing 50+% uptick in housing prices and big stock market gains has been a bonus for many of us.

As for savings, I remember a wise business mentor saying to me "you don't think a $100K is a lot of many, then try and save it". For people having limited savings accounts, it is not completely because they are bad with money. I truly feel for the people that are doing the right things and still struggling.

That's a great line!

[Skatastrophy]

Lots of people in America ARE bad with their money.

I've known many struggling people who think nothing of spending $100+ for alcohol and cigarettes every week.

That's only 5 packs of cigarettes in Chicago these days.

Also, people in America bad with money in that "living paycheck to paycheck" is not a good measure of actual money problems. I have friends making $200k+ that are heavily in debt. They are living paycheck to paycheck.

Again, surveys are bad measures of the economy and affordability. Large % of American consumers are a little too good at the consumer part of things.

[Jockey]

Available jobs decreasing
https://www.cnn.com/2024/06/04/economy/job-openings-quits-jolts-april/index.html

Not necessarily a bad thing.

[lawdog77]

Not necessarily a bad thing.

I think the saying is it may be bad for Main Street, but not Wall Street.

[tower912]

Still 1.2 openings for every applicant.

[Hards Alumni]

https://prospect.org/economy/2024-06-04-one-person-one-price/

A fantastic article that everyone should read.

[Goose]

Skatastrophy

People living paycheck to paycheck making more money is more troublesome, imo. These people are helping drive the economy and we need them spending. If they decide to be good with money it will not help the economy. IMO, there are a good number of $200k folks that have been for the economy over the short term and may be the ones that stop driving the economy.

I saw an article earlier this week that YOLO mindset is being replaced with the YONO mindset. At some point people were going to run out of money or wise up. Either way, I think this is something to watch closely. For the record, I saw that article on CNN.COM for those with questions on the surce.

[Skatastrophy]

Skatastrophy

People living paycheck to paycheck making more money is more troublesome, imo. These people are helping drive the economy and we need them spending. If they decide to be good with money it will not help the economy. IMO, there are a good number of $200k folks that have been for the economy over the short term and may be the ones that stop driving the economy.

I saw an article earlier this week that YOLO mindset is being replaced with the YONO mindset. At some point people were going to run out of money or wise up. Either way, I think this is something to watch closely. For the record, I saw that article on CNN.COM for those with questions on the surce.

I agree. The 70% of US citizens living paycheck to paycheck is bullish, and we really need to get that number up. USA USA

[lawdog77]

Skatastrophy

People living paycheck to paycheck making more money is more troublesome, imo. These people are helping drive the economy and we need them spending. If they decide to be good with money it will not help the economy. IMO, there are a good number of $200k folks that have been for the economy over the short term and may be the ones that stop driving the economy.

I saw an article earlier this week that YOLO mindset is being replaced with the YONO mindset. At some point people were going to run out of money or wise up. Either way, I think this is something to watch closely. For the record, I saw that article on CNN.COM for those with questions on the surce.

One of the biggest ways people start to live below their means is to downsize their home. Unfortunately, that is not good of an option as it was in the past.

[Goose]

Skatastrophy

I had a good friend years ago that used to say that on a down year he only spent $1.5 for every $1 made. I used "had" because that got him in some financial troubles and Uncle Goose bailed him more than I would have liked, and I am still waiting to get paid back.