Americans are saying that the economy is horrible when people ask them questions for the polls but in reality is it terrible? Unemployment is so low, inflation is dropping, and the big kicker is that people are still spending loads of money!
Although Americans are saying that the economy is bad, it is not topping us from racking up credit card debt for the leisurely activities people want to do. This article specifically mentions the fact that American have spent LOADS of money on Taylor Swift tickets, but we can see this in a bunch of other purchases made by Americans.
In the article it mentions that young adults cannot afford a house with the high prices and mortgage rates. This all goes hand in hand together with young adults being okay to spend money on other tangible fun things to do rather than a house and to live paycheck to pay check. It is really interesting and I wonder what I am going to walk into when I graduate this upcoming Spring.
https://www.cnn.com/2023/11/08/business/consumer-spending-us-economy-nightcap/index.html
Just from what I saw in my article, consumers are upset that prices for regular goods are rising despite experiencing an increase in wages because they don't typically think about inflation affecting prices/wages. However, at the same time, they are consuming at extremely high rates as you mentioned. This influx of spending on credit will likely affect consumer credit in the following months. The online real estate market recently faced a huge lawsuit as well, restructuring the way real estate agents get commissions on deals, so hopefully that will be done in a way that benefits young consumers like ourselves. Another hope is that mortgage rates start to come down as we get closer to graduating, but only time will tell.
ReplyDeleteCredit scores for consumers may also be reduced if they are unable to pay off their credit card bills as a result of inflationary effects. Taylor Swift tickets will most definitely not help their case.
ReplyDeleteI do think people are spending like they believe the economy is in a good situation, even if they say they are not. But in terms of housing market, I believe its affordability is at its lowest point in decades. Probably because with the rising interest rates by the Federal Reserve in the past months, mortgage rates were also pushed higher. Not only that, but also the low inventory, especially after the pandemic and also as a reflect of the 2008 crisis.
ReplyDeleteI am an extremely frugal young adult who has never seen a deal that I like. Whether it is black Friday or cyber Monday, I try my hardest to not spend any unnecessary money for those exact reasons. Our future is so uncertain in terms of housing and jobs and more, that I make sure to take all the necessary precautions.
ReplyDeleteGreat post! I am intrigued to see what the future economy and specifically the federal funds rate looks like within the next few years. With many having a revolving credit card balance it is also bringing down their credit, which can make it more difficult to buy a house. I am thankful I was always taught to pay off my credit card every month, because it has led to a great credit score. My parents bought their first house right before the 2008 recession, my mom had just graduated college that same year and was able to receive a home loan. It is mind blowing how much has changed within the last 20 years and even more mind blowing that 20 years before that rates were extremely high, higher than they are right now.
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