American Economics Thread

zbb

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Take low-income consumers: At an
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at the Economic Club of Chicago in late February,
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Chief Executive Doug McMillon said “budget-pressured” customers are showing stressed behaviors: They are buying smaller pack sizes at the end of the month because their “money runs out before the month is gone.”
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said in its most recent earnings call that the fast-food industry has had a “sluggish start” to the year, in part because of weak demand from low-income consumers. Across the U.S. fast-food industry, sales to low-income guests were down by a double-digit percentage in the fourth quarter compared with a year earlier, according to McDonald’s.
Things don’t look much better on the higher end. American consumers’ spending on the luxury market, which includes high-end department stores and online platforms, fell 9.3% in February from a year earlier, worse than the 5.9% decline in January, according to Citi’s analysis of its credit-card transactions data.
Citi’s analysis of its U.S. credit-card data shows that spending has fallen across most retail categories. In the retail quarter to date, spending plunged 12% and 22% on apparel and athletic footwear, respectively, compared with a year earlier. But even less-discretionary categories such as food retail, aftermarket auto parts and pet retail are seeing moderate declines.
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Sinnavuuty

Senior Member
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American Dream!!!
Part 30:
We just witnessed the biggest month-over-month drop in retail sales since January 2024:
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New data out Friday showed retail sales declined more than expected in the first month of 2025.

Headline retail sales fell 0.9% in January, more than the 0.2% decline economists had expected, according to Bloomberg data. This marked the largest month-over-month decline in retail sales since January 2024.
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We’re also seeing subprime defaults rise. In fact, the delinquency rate for subprime auto loans that are at least 60 days delinquent just hit an all-time high:
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60+ day auto loan delinquencies in the subprime cohort (less credit-worthy borrowers) hit 6.56% in December 2024—the highest ever recorded. That’s up from 6.01% in November 2024 and 6.27% in 2023.
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In January, pending home sales fell to an all-time low:
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Contracts to buy previously owned homes fell to a record low in January as prospective buyers were constrained by higher mortgage rates and house prices.

The National Association of Realtors (NAR) said on Thursday that its Pending Home Sales Index, which is based on signed contracts, declined by 4.6% last month to 70.6, an all-time low.

Economists polled by Reuters had forecast contracts, which became sales after a month or two, falling by 1.3% in January. Pending home sales were down 5.2% from a year ago.
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Alarmingly, approximately one in every seven pending home sales was canceled in January. This represents “the highest cancellation rate for this time of year since at least 2017”:
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More home purchases are being canceled, especially in the southeastern part of the country. Just over 41,000 U.S. home-purchase agreements fell through in January, equal to 14.3% of homes that went under contract that month. That’s up from 13.4% a year earlier, and the highest cancellation rate for this time of year since at least 2017.
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For a long time, the U.S. exported far more food than it imported, but now the reverse is true. By 2025, the U.S. is expected to have a $49 billion agricultural trade deficit …
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The U.S., known for being a global agriculture powerhouse, has never imported so much food.

Inbound shipments of everything from avocados to coffee and sugar are expected to drive the country’s agriculture trade deficit to a record $49 billion this year, the U.S. Department of Agriculture said in its trade outlook report. At the same time, America’s most widely grown crops have been losing overseas markets over the past decades.

It’s a stark turnaround for a nation that once used its abundant food supplies as a tool of statecraft, with the U.S. now facing a future of persistent agricultural trade deficits.
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Americans consume far more than they produce, buy far more things than they make, accumulate the largest mountain of debt in the history of the world, and depend on the rest of the world to send them what they need. GDP growth is expected to be negative during the first quarter, inflation is rising again, home sales are at extremely depressed levels, retail sales are down, stores and restaurants are closing at a staggering rate, debt levels are out of control, and mass layoffs are happening across the country:
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President Donald Trump’s efforts to pare down the federal government workforce left a mark on the labor market in February, with announced job cuts at their highest level in nearly five years, outplacement firm Challenger, Gray & Christmas reported Thursday.

The firm reported that U.S. employers announced 172,017 layoffs for the month, up 245% from January and the highest monthly count since July 2020 during the heightened uncertainty from the Covid pandemic. In addition, it marked the highest total for the month of February since 2009 during the global financial crisis.
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The trade deficit with the rest of the world has reached an all-time high:
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The US trade deficit widened to a record in January as companies scrambled to secure goods from overseas before President Donald Trump imposed tariffs on America’s largest trading partners.

The gap in goods and services trade widened 34% from the previous month to $131.4 billion, Commerce Department data showed Thursday. The deficit was larger than all but one estimate in a Bloomberg survey of economists.
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The percentage of Americans who are “raiding their retirement savings” has never been higher:
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More Americans are raiding their retirement savings to cover emergency expenses, taking early withdrawals from their 401(k)s.

A record 4.8 percent of account holders took hardship withdrawals last year, up from 3.6 percent in 2023, according to Vanguard Group, which examined data from nearly 5 million people with 401(k)-type accounts.
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This year, the price of a dozen eggs in the United States hit an all-time high:
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In January, the average price of a dozen eggs hit a record high of $4.95, up from $2.52 a year prior.
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Coresight Research is telling us that approximately 15,000 stores will permanently close in the United States by 2025. That would be a new all-time high by a wide margin.
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U.S. retailers are expected to close more stores than they opened again this year, according to Coresight Research. Last year, 5,970 stores opened and 7,325 closed, a net loss of 1,355 as of Jan. 10.
In 2025, Coresight expects about 15,000 U.S. stores to shutter, as openings remain steady at about 5,800.
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Credit card debt in the United States surpassed the $1.2 trillion mark for the first time:
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Americans’ total credit card balances now stand at a record-high $1.21 trillion, the report said.
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Total U.S. household debt has surpassed the $18 trillion mark for the first time:
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Americans’ household debt — including credit cards, mortgages, auto loans and student loans — is at a new all-time high of $18.04 trillion, according to a report released Thursday by the Federal Reserve Bank of New York.
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The U.S. national debt has surpassed the $36 trillion mark for the first time.
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siegecrossbow

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The percentage of Americans who are “raiding their retirement savings” has never been higher:
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People who have 401Ks are usually financially responsible enough that they only withdraw money before retirement if there is no other choice. Probably most are jobless and have run out of savings.
 
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