April 17, 2023
The American middle class is under immense pressure from inflation (which the Federal Reserve is trying to fix, though causing collateral damage in the process). It wasn’t too long ago that a six-figure salary would provide a comfortable lifestyle. But it seems those days are gone. Now too many well-paid workers are succumbing to financial pressures.
There are many examples out there, and you probably know of some yourself. Crushing inflation is wreaking havoc on everyday Americans. Families once living the American dream are now straining to survive. Wages aren’t keeping up with costs, meaning net poorer Americans.
Unfortunately, it’s probably going to get worse. Many economists think we’ll see a recession soon.
That might put millions out of work, which would cause consumer spending to dry up. Credit availability will be even tighter. And of course, this would be horrible for many stocks and bonds. Yet the media cites minor drops in inflation as evidence of the problem being solved, which will eventually lead to lower interest rates and a return of the “good ol’ days.”
However, that’s all based on lagging data. Employment and retail sales figures are past tense. They don’t reflect the current situation or the future.
This is all troublesome for the average American. More than 64% of Americans live paycheck to paycheck (that’s 166 million people). The stimulus checks are gone, as are much of people’s savings. Many resort to credit cards for living expenses while those interest rates average more than 20%.
The inflation story is a bad one and it’s creating more victims every day.