US economy thread (5 Viewers)

[The Z Machine]

You what sucks about inflation? Having $25 minimum bets at craps tables. Gah, money goes too quick that way.

I want my $10 table! I'll take $15 if I have to, but $25? Backing up that bet is costly.

 

[FreeBaGeL]

You what sucks about inflation? Having $25 minimum bets at craps tables. Gah, money goes too quick that way.

I want my $10 table! I'll take $15 if I have to, but $25? Backing up that bet is costly.

Most reasonable post of the entire thread here. I haven't been to Vegas since covid. I remember $10 tables were getting harder to find already even before that.

 

[massraider]

I don't understand the point of trying to sit here and say that isn't the case. It is. Everyone knows it's true.

Right. If everyone is not using inflation to gouge customers, it doesn't mean many are not.

Lol. Classic logical fallacy shifting burden of proof.

Even if no one's seen a unicorn, it doesn't mean they don't exist!

Yeah, you didn't read my post correctly, because I am pretty much saying the opposite of that.

Everyone has seen a unicorn, that's the point.

 

[FreeBaGeL]

Here’s a link to things that cost less now than a year ago:

U.S.’s annual inflation rate is 5%. But here are 10 things that are actually cheaper now than they were a year ago.

Although prices have largely increased in the last 12 months, money pros say there are still some areas unaffected by inflation.

www.marketwatch.com

I’m not sharing it to demonstrate that inflation is fake. Or that it has disappeared. Just asking a direct request you posed above.

Interesting. I think this kind of shows just how much the price of "regular" goods are still rising.

If I'm reading this right gas, shelter, and cars make up 47% of the CPI index and those three things are down 17%, 8%, and 11% respectively, yet the index as a whole is still up 4%. I think that jives with what a lot of people have been seeing this thread where the price of everyday goods seem to anecdotally (and likely in reality) still be going up at a rate much higher than 4%.

Also, given that fuel costs were a primary excuse a lot of companies were using for why they were raising prices, it's a pretty big slap in the face when those prices are still rising rapidly alongside fuel having the largest declining price in the entire index.

 

[BeTheMatch]

Bought All liquid laundry detergent two weeks ago at my main grocery store. It was $8.99 for 88 oz. And wasn't on sale.

Just returned to the same store today and bought the exact same size and brand bottle.

Would anyone care to guess what it cost this time?

$18.99.

That's not a typo.

But, hey, there's definitely not price gouging going on. And inflation is only like 4%, so no big deal.

How scientific

It's not exactly rocket science, though, is it?

Wow!! So inflation is over 100% every two weeks now — that truly is hyperinflation.

Did you buy 4 bottles? I mean, clearly the price will be $36+ in a couple weeks.

Yes, that's definitely what I said. You really got me good there.

Clearly you are a smart individual. I’m just highlighting the uselessness of using a single example to prove a hypothesis on a topic as complex as price inflation.

In seriousness, what price do you expect to find in 2 weeks?

What's it going to be in 2 weeks? Who knows? And who cares? Whatever that number is, what would it prove? I don't even understand your point.

My examples are more useful than ignoring everything because "it's only one example" or "that's anecdotal." How many examples do you need? I've given more than one in this thread and others.

I could list hundreds or thousands of items and their increases if that was necessary, but it isn't.

It's far more useless to say "inflation is only 4%" when facts on the ground simply don't bear that out. Go to a store. Any store. Find me something that costs less now than it did a year ago. I would suggest you can't.

Every single thing I buy - everyday staples, bigger-ticket items, everything - is dramatically more expensive than it was six months ago or a year ago. It's just a matter of how much more expensive. And it ain't 4 percent.

I don't understand the point of trying to sit here and say that isn't the case. It is. Everyone knows it's true.

So why is that? Well, sure, it may be a complex answer for each different thing. But there's a general pattern of huge, huge price increases in every sector. And if you think corporate greed isn't playing a huge role in all this, well, then I'd say I think you're very naive.

It would be easier to cite examples of things that have only gone up slightly. I can think of a grand total of one thing that hasn't had huge price increases and/or package shrinking, and that's milk. And that's still gone up more than 4 percent.

Of course there are differences on certain items in certain areas. And I don't have access to that info. But I am sharing my info. And it's real. And it's fact.

So where does this 4 percent number come from? I don't know. But if that's what the grand formula is for determining inflation, it's all ********. It's made up. Common sense tells you that. Look around and open your eyes. There's a very obvious pattern, and it's a giant arrow pointed up on all prices.

Many of the things you wrote above aren’t even things I’ve opined on. Like the 4% inflation number. Really, I don’t get why most of your post is directed at me.

On the flip side, I do completely understand that a) inflation is real, b) prices increased massively over the past 18 months or so, c) if prices stay flat for the next year, that means prices are still hugely inflated vs a couple years ago, and that will cause tremendous pain to people.


Here’s a link to things that cost less now than a year ago:

U.S.’s annual inflation rate is 5%. But here are 10 things that are actually cheaper now than they were a year ago.

Although prices have largely increased in the last 12 months, money pros say there are still some areas unaffected by inflation.

www.marketwatch.com

I’m not sharing it to demonstrate that inflation is fake. Or that it has disappeared. Just asking a direct request you posed above.

A lot of those items in the article you linked are only "down" compared to their peak all-time highs set very recently. Meaning they are still up significantly overall from not long before that.

The used car example is particularly insane to me, for it to say used car prices are down. Compared to what? And where?

 

[Alex P Keaton]

Here’s a link to things that cost less now than a year ago:

U.S.’s annual inflation rate is 5%. But here are 10 things that are actually cheaper now than they were a year ago.

Although prices have largely increased in the last 12 months, money pros say there are still some areas unaffected by inflation.

www.marketwatch.com

I’m not sharing it to demonstrate that inflation is fake. Or that it has disappeared. Just asking a direct request you posed above.

Interesting. I think this kind of shows just how much the price of "regular" goods are still rising.

If I'm reading this right gas, shelter, and cars make up 47% of the CPI index and those three things are down 17%, 8%, and 11% respectively, yet the index as a whole is still up 4%. I think that jives with what a lot of people have been seeing this thread where the price of everyday goods seem to anecdotally (and likely in reality) still be going up at a rate much higher than 4%.

Also, given that fuel costs were a primary excuse a lot of companies were using for why they were raising prices, it's a pretty big slap in the face when those prices are still rising rapidly alongside fuel having the largest declining price in the entire index.

Zero disagreement.

 

[BeTheMatch]

Here’s a link to things that cost less now than a year ago:

U.S.’s annual inflation rate is 5%. But here are 10 things that are actually cheaper now than they were a year ago.

Although prices have largely increased in the last 12 months, money pros say there are still some areas unaffected by inflation.

www.marketwatch.com

I’m not sharing it to demonstrate that inflation is fake. Or that it has disappeared. Just asking a direct request you posed above.

Interesting. I think this kind of shows just how much the price of "regular" goods are still rising.

If I'm reading this right gas, shelter, and cars make up 47% of the CPI index and those three things are down 17%, 8%, and 11% respectively, yet the index as a whole is still up 4%. I think that jives with what a lot of people have been seeing this thread where the price of everyday goods seem to anecdotally (and likely in reality) still be going up at a rate much higher than 4%.

Also, given that fuel costs were a primary excuse a lot of companies were using for why they were raising prices, it's a pretty big slap in the face when those prices are still rising rapidly alongside fuel having the largest declining price in the entire index.

I was thinking the same thing. I hear that excuse all the time.

 

[Alex P Keaton]

Bought All liquid laundry detergent two weeks ago at my main grocery store. It was $8.99 for 88 oz. And wasn't on sale.

Just returned to the same store today and bought the exact same size and brand bottle.

Would anyone care to guess what it cost this time?

$18.99.

That's not a typo.

But, hey, there's definitely not price gouging going on. And inflation is only like 4%, so no big deal.

How scientific

It's not exactly rocket science, though, is it?

Wow!! So inflation is over 100% every two weeks now — that truly is hyperinflation.

Did you buy 4 bottles? I mean, clearly the price will be $36+ in a couple weeks.

Yes, that's definitely what I said. You really got me good there.

Clearly you are a smart individual. I’m just highlighting the uselessness of using a single example to prove a hypothesis on a topic as complex as price inflation.

In seriousness, what price do you expect to find in 2 weeks?

What's it going to be in 2 weeks? Who knows? And who cares? Whatever that number is, what would it prove? I don't even understand your point.

My examples are more useful than ignoring everything because "it's only one example" or "that's anecdotal." How many examples do you need? I've given more than one in this thread and others.

I could list hundreds or thousands of items and their increases if that was necessary, but it isn't.

It's far more useless to say "inflation is only 4%" when facts on the ground simply don't bear that out. Go to a store. Any store. Find me something that costs less now than it did a year ago. I would suggest you can't.

Every single thing I buy - everyday staples, bigger-ticket items, everything - is dramatically more expensive than it was six months ago or a year ago. It's just a matter of how much more expensive. And it ain't 4 percent.

I don't understand the point of trying to sit here and say that isn't the case. It is. Everyone knows it's true.

So why is that? Well, sure, it may be a complex answer for each different thing. But there's a general pattern of huge, huge price increases in every sector. And if you think corporate greed isn't playing a huge role in all this, well, then I'd say I think you're very naive.

It would be easier to cite examples of things that have only gone up slightly. I can think of a grand total of one thing that hasn't had huge price increases and/or package shrinking, and that's milk. And that's still gone up more than 4 percent.

Of course there are differences on certain items in certain areas. And I don't have access to that info. But I am sharing my info. And it's real. And it's fact.

So where does this 4 percent number come from? I don't know. But if that's what the grand formula is for determining inflation, it's all ********. It's made up. Common sense tells you that. Look around and open your eyes. There's a very obvious pattern, and it's a giant arrow pointed up on all prices.

Many of the things you wrote above aren’t even things I’ve opined on. Like the 4% inflation number. Really, I don’t get why most of your post is directed at me.

On the flip side, I do completely understand that a) inflation is real, b) prices increased massively over the past 18 months or so, c) if prices stay flat for the next year, that means prices are still hugely inflated vs a couple years ago, and that will cause tremendous pain to people.


Here’s a link to things that cost less now than a year ago:

U.S.’s annual inflation rate is 5%. But here are 10 things that are actually cheaper now than they were a year ago.

Although prices have largely increased in the last 12 months, money pros say there are still some areas unaffected by inflation.

www.marketwatch.com

I’m not sharing it to demonstrate that inflation is fake. Or that it has disappeared. Just asking a direct request you posed above.

A lot of those items in the article you linked are only "down" compared to their peak all-time highs set very recently. Meaning they are still up significantly overall from not long before that.

The used car example is particularly insane to me, for it to say used car prices are down. Compared to what? And where?

Again, zero disagreement. You asked for examples of items that went down in price the past year.

Edit to add: I actually made a similar point (that a lot of items in the world are down from “highs”) in the comment you quoted.

 

[Stoneworker]

I don't understand the point of trying to sit here and say that isn't the case. It is. Everyone knows it's true.

Right. If everyone is not using inflation to gouge customers, it doesn't mean many are not.

Lol. Classic logical fallacy shifting burden of proof.

Even if no one's seen a unicorn, it doesn't mean they don't exist!

Yeah, you didn't read my post correctly, because I am pretty much saying the opposite of that.

Everyone has seen a unicorn, that's the point.

Ok. My misunderstanding then.

I dug into it a little bit and it appears that some economists are making assertions that many are using inflation as cover for sneaking through price increases. But no real proof. However, it does make intuitive sense and quite possibly where there's smoke there's fire.

Some of the best proof might come from watching the PPI vs the CPI in the next few quarters. The PPI was <3% annualized in May.

So if producers have lowered their prices, but costs keep going up on the retail side, then IMO that's a pretty good smoking gun for price gouging.

 

[Desert_Power]

You what sucks about inflation? Having $25 minimum bets at craps tables. Gah, money goes too quick that way.

I want my $10 table! I'll take $15 if I have to, but $25? Backing up that bet is costly.

Was that way the last time I went just before covid. Found like one $15 table in Harrah's by the door.

 

[LawFitz]

Inflation is always a moving target, in that the baseline is always the prior month or year. It's actually hard to maintain high levels of measured inflation over longer periods due to this dynamic. But just because inflation subsides, doesn't mean the pain already created does as well.

As for where we currently stand in the longer cycle, Hard Times create Hard Men, Hard Men create Soft Times, Soft Times create Soft Men, and Soft Men create Hard Times
Rinse and repeat.

 

[MAC_32]

It's far more useless to say "inflation is only 4%" when facts on the ground simply don't bear that out. Go to a store. Any store. Find me something that costs less now than it did a year ago. I would suggest you can't.

I get your point but I just bought ice cream for $1.99 a pop, yogurt for $0.50, and 8 porterhouse's at $7.99/lb. Arguments rooted in absolutes are easy for those to counter and distract from the real problem that @Todem got at.

 

[need2know]

You what sucks about inflation? Having $25 minimum bets at craps tables. Gah, money goes too quick that way.

I want my $10 table! I'll take $15 if I have to, but $25? Backing up that bet is costly.

i remember 5 dollar tables. i miss them

 

[massraider]

Knight-Swift Reports 71% Earnings Drop for Q2 $KNX #freight

.CEO David Jackson said during a call with investors. “I don’t know that we’ve ever seen freight demand fall this far so fast and for so long without an accompanying economic #recession.”

 

[Orange&Blue]

Wholesale weakness slowing US inventory destocking, freight demand | Journal of Commerce

US businesses may have passed the inventory peak, but data shows stockpiles remain high, and a weak wholesale retail market is depressing imports and surface freight shipments.

www.joc.com

“Clearly, the lower or moderate-income consumer is being squeezed,” CEO Bergh said during Levi Strauss’s earnings call. As a result, wholesale retailers are being cautious with orders.

That means destocking is likely to slow, further depressing freight demand, unless consumers begin to feel more confident as the fall holiday sales approach, especially those with moderate incomes.

 

[General Malaise]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

 

[bcat01]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

Hardship withdraws from 401k plans is also rising.
https://www.cnn.com/2023/08/08/econ...number of people who,more than 4 million plan

 

[Stoneworker]

Wait until student loan payments resume in September. That's going to suck another $250-$300 out of monthly cash flow for millions.

 

[FreeBaGeL]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

 

[FreeBaGeL]

Knight-Swift Reports 71% Earnings Drop for Q2 $KNX #freight

.CEO David Jackson said during a call with investors. “I don’t know that we’ve ever seen freight demand fall this far so fast and for so long without an accompanying economic #recession.”

Yet the stock is up 8% since that report and currently sitting at an all-time high.

I would assume freight went WAY up, artificially, during covid. So seems natural it would come way back down as the world has returned to normal. But I'm just guessing, I didn't read the whole earnings report.

 

[BigJim®]

May not be indicative of the state of our economy, but I've had several discretionary products I was looking to buy over the past year and *clearly* the cost of these (both new and used) does not indicate a lack of buyers.

 

[Nathan R. Jessep]

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

Was just about to post about this as well, thanks for the thread bump.

https://www.cnn.com/2023/08/08/economy/us-household-credit-card-debt/index.html?_hsmi=269550237

 

[Nathan R. Jessep]

Related perhaps....
Amazon had such a successful Prime Day this year, they're running another one in October:

Amazon is running a second Prime Day sale in October

The Prime Day sequel comes as retailers are bracing for a downbeat holiday spending season this year.

www.cnbc.com

 

[Stoneworker]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

CC and consumer loans are tracked by multiple sources of the Fed. Historically it trends up but went down during the 2009 recession and during the pandemic from about $840B to about $740B.

Consumer Loans: Credit Cards and Other Revolving Plans, All Commercial Banks

Graph and download economic data for Consumer Loans: Credit Cards and Other Revolving Plans, All Commercial Banks (CCLACBW027SBOG) from 2000-06-28 to 2023-07-26 about revolving, credit cards, loans, consumer, banks, depository institutions, and USA.

fred.stlouisfed.org

 

[General Malaise]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

Oh, I think it goes down when there are charge offs, which are coming....but I get your point. Still, surpassing 1 trillion doesn't sound rosy.

 

[Buckna]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

Not a bad question, it went down significantly during Covid for many reasons, lots of stimulus, lots of savings working from home, lots of mortgage refi’s as rates hit rock bottom. There generally are short periods of decline here and there but the trendline tends to always march ever upwards. The rate of increase tends to be something that is more relevant to the current economy. The potentially alarming thing currently is how quickly the debt amounts have ballooned in such a short time to basically be back inline with the historical trend prior to Covid when it had declined so significantly from 2020 to 2022.

 

[FreeBaGeL]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

Not a bad question, it went down significantly during Covid for many reasons, lots of stimulus, lots of savings working from home, lots of mortgage refi’s as rates hit rock bottom. There generally are short periods of decline here and there but the trendline tends to always march ever upwards. The rate of increase tends to be something that is more relevant to the current economy. The potentially alarming thing currently is how quickly the debt amounts have ballooned in such a short time to basically be back inline with the historical trend prior to Covid when it had declined so significantly from 2020 to 2022.

Thanks for the explanation.

I think this seems to be another thing in line with the general trend that most things that were artificially boosted during covid have been the fastest to regress back to their prior mean.

The things that saw the starkest change during Covid in one direction have seen the starkest change in the opposite direction coming out of it.

Online shopping grew the fastest it ever had during covid, and declined the fastest it ever had when stores opened back up, and now has normalized.

Video conferencing grew the fastest it ever had during covid, and declined the fastest it ever had when stores opened back up, and now has normalized.

Netflix/streaming subs grew abnormally fast during covid, and declined (for the first time ever) when people could go back into the world, and now have normalized.

Meta/social media signups grew abnormally fast during covid, and declined (again, for the first time ever) when people could go back into the world, and now have normalized.

From above, freight shipping grew abnormally fast during covid, now has shrunk back quickly, and given that freight stocks haven't been negatively impacted by it I'm assuming have normalized.

Credit card debt shrunk when people got free money to pay it down, but have risen starkly once the free money dried up, and now have normalized.

 

[FreeBaGeL]

I think the biggest issue is that we as humans are adaptable. Too much so, at times. We get used to a new normal easily, and then it's hard to break that.

My wife and I have always been heavy investors, and lived in a very modest, 1990's style house. We got used to it, didn't seem bad, didn't seem great. We finally decided to do a huge renovation and make our house really, really nice. Completely gutted the place and re-did it with modern high end finishes, open concept, etc. It was awesome! For about a month. Now, it's just the place I live. I don't get any different feeling walking out into the living room now than I used to pre-renovation. I'm just kind of used to it, the same way I was before, even though it's MUCH nicer now.
li
I think we see that in everything. We cut interest rates in 2018, have had stimulus, unlimited QE, etc since then. Most people have been doing very well, or at least getting by with plenty of money leftover for discretionary spending (I realize not everyone, but a lot of people). Now everyone has gotten used to eating out 6 times a month instead of 6 times a year. Everyone has gotten used to going on 3 vacations per year instead of one vacation every 3 years. Everyone has gotten used to big TVs and unlimited streaming options and nice phones and a nice cars and etc. It doesn't feel like as much of a luxury anymore, so much as a necessity.

So when the money stops getting easy, how much are people going to give those things up vs. cut back on their savings/investments, or even go into debt to keep it going? Then I guess the question is, if they're piling on debt to keep living the same way they're now accustomed to, how is that going to end? Can we ride that out for a long time like the government or will it eventually blow up in everyone's faces and create another huge, 2008 style correction?

 

[PIK95]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

Ruh roh....

MinneapolisCNN —
Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

During the second quarter, credit card balances shot up by $45 billion, or nearly 4.6%, to land at $1.03 trillion, according to the New York Fed’s latest Quarterly Report on Household Debt and Credit.

Rising credit card debt and auto loan balances helped to drive overall household debt levels up 1%, to $17.06 trillion for the quarter, the report showed. Overall household debt has spiked by $2.9 trillion since the end of 2019, before the pandemic. The New York Fed’s debt balances are nominal and not adjusted for inflation.


These increases are coming at a time when interest rates have quickly vaulted to a 22-year high.

I'm just curious. Do credit card debt levels ever go down or is this just something that's always rising? I feel like "credit card debt reaches an all-time high" is a story that's been repeated every month for the last 20 years.

Abound 2010 we had some awful floods up here that destroyed us. We had rental properties and basically lost everything. It was right after I left the p.o. also. We used CC's to try and get out of all that, but by 2015ish we were in really bad shape. So tried one of those consolidation plans but after a year we just said forget it and stopped paying all of it. Started to get back on our feet in 18-19 then covid killed that. So now we are just waiting for all that old debt to drop off and still in survival mode. It's been bad, but others have it way worse I know.

 

[FairWarning]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

 

[PIK95]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

I think it was 11%ish from my credit union. I am more like 620, lol.

 

[Jayrod]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

I just bought a used GMC truck 2 weeks ago.

I'm right at a 700 credit score and got 9% from my credit union. Also bought a warranty and gap insurance with the loan and they took it down to 8% and extended it 6 months.

ETA - I imagine us just having paid off a couple of auto loans with the same credit union helped.

 

[fruity pebbles]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

Yikes. At that rate I’m not financing anything.

 

[Jayrod]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

Yikes. At that rate I’m not financing anything.

Prior to 2000, auto rates were normally around 8-12%. We've gotten spoiled over the last 20 years and especially the last 10.

My last auto loan before this one was 4.0%, right at 5 years ago...which was around the lowest in the 50+ year history of auto financing.

 

[FairWarning]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

I think it was 11%ish from my credit union. I am more like 620, lol.

It took me two years, but I was 650 (too much usage).

 

[Hawks64]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

What mfg and who owned the lease? Just got our kids a new Honda at 3.9%

 

[FairWarning]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

What mfg and who owned the lease? Just got our kids a new Honda at 3.9%

GM, it is as an equinox. The Honda dealer by me has a lot that is 1/3 full, mainly used.

 

[Hawks64]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

What mfg and who owned the lease? Just got our kids a new Honda at 3.9%

GM, it is as an equinox. The Honda dealer by me has a lot that is 1/3 full, mainly used.

That's crazy. Was the buy out really high?

 

[fruity pebbles]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

Yikes. At that rate I’m not financing anything.

Prior to 2000, auto rates were normally around 8-12%. We've gotten spoiled over the last 20 years and especially the last 10.

My last auto loan before this one was 4.0%, right at 5 years ago...which was around the lowest in the 50+ year history of auto financing.

Cars were a lot cheaper prior to 2000. It’s a combination of sky high prices (cars and houses) in addition to the historically normal rate.

 

[FairWarning]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

What mfg and who owned the lease? Just got our kids a new Honda at 3.9%

GM, it is as an equinox. The Honda dealer by me has a lot that is 1/3 full, mainly used.

That's crazy. Was the buy out really high?

$17,000

 

[Buckna]

Shopped around and best I could get quoted was 4.9% in late April for a new Outback. Over 800 credit score as well.

 

[Hawks64]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

What mfg and who owned the lease? Just got our kids a new Honda at 3.9%

GM, it is as an equinox. The Honda dealer by me has a lot that is 1/3 full, mainly used.

That's crazy. Was the buy out really high?

$17,000

Assuming it's a short loan then...that's not bad at all.

 

[Poke_4_Life]

Re: Credit card debt and trends. I'm sure that debt is also growing faster because of the higher interest rates. Higher rates make balances rise much faster. Some less knowledgeable folks are going to be in sticker shock seeing their balances in coming months.

 

[Orange&Blue]

Related perhaps....
Amazon had such a successful Prime Day this year, they're running another one in October:

Amazon is running a second Prime Day sale in October

The Prime Day sequel comes as retailers are bracing for a downbeat holiday spending season this year.

www.cnbc.com

or they didn't have a good one and need another to make up the difference??

 

[Orange&Blue]

I bought out my car lease yesterday. I have a 805 credit score and the best rate I could get was 8.6%, absolutely sick over it. What are people with a 665 paying?

Yikes. At that rate I’m not financing anything.

Prior to 2000, auto rates were normally around 8-12%. We've gotten spoiled over the last 20 years and especially the last 10.

My last auto loan before this one was 4.0%, right at 5 years ago...which was around the lowest in the 50+ year history of auto financing.

which is why i always do cash buys on used cars.

of course, used car market sucks right now.

 

[Dinsy Ejotuz]

Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

Probably not that big of a deal.

tl;dr: CC debt is up 8% since Q4 2019 (pre COVID), but GDP is 24% higher, HH wealth is 28% higher, and home equity is 48% higher.

 

[Nathan R. Jessep]

Related perhaps....
Amazon had such a successful Prime Day this year, they're running another one in October:

Amazon is running a second Prime Day sale in October

The Prime Day sequel comes as retailers are bracing for a downbeat holiday spending season this year.

www.cnbc.com

or they didn't have a good one and need another to make up the difference??

Amazon touts 'biggest ever' Prime Day as U.S. online sales surge to $12.7 billion

Amazon called the first 24 hours of Prime Day the "single largest sales day in company history," but it did not disclose total sales.

www.cnbc.com

 

[massraider]

or they didn't have a good one and need another to make up the difference??

Maybe just testing America's appetite for Prime Day. Maybe Amazon could kill it with two or three a year.

It's not really fair that only once a year we get to brag about getting $20 off a little speaker that can tell us the weather/play a song/spy on us.

 

[Jayrod]

Americans’ credit card debt levels have just notched a new, but undesirable, milestone: For the first time ever, they’ve surpassed $1 trillion, according to data released Tuesday by the Federal Reserve Bank of New York.

Probably not that big of a deal.

tl;dr: CC debt is up 8% since Q4 2019 (pre COVID), but GDP is 24% higher, HH wealth is 28% higher, and home equity is 48% higher.

Read the article.

He makes a LOT of assumptions and his primary basis for saying it isn't a problem is that asset prices went up (homes and cars). That's great and all, but unless you plan to sell a house or car and either downsize or not replace it, that increase doesn't help at all. At best, people can borrow on the increased equity...but, interest rates aren't favorable there.

I'm not sold and our over reliance on credit card debt IS troubling, IMO.

 

[Dinsy Ejotuz]

asset prices went up (homes and cars)

Also real incomes (28%). Especially real incomes in the "bottom" 50% of the workforce.