The article talks about the inverted yield curve, which now apparently signals a 67% chance of recession looking 12 months ahead. That's higher than any time since 1982. This isn't my area. I'm...
The article talks about the inverted yield curve, which now apparently signals a 67% chance of recession looking 12 months ahead. That's higher than any time since 1982.
This isn't my area. I'm into fast trains, dense cities, and, like... cement. But the yield curve has always seemed like a descriptive metric. For me, these things are a matter of faith. Wondering how much to put into this.
It's nothing magical. When you're looking to buy a bond, you can think of the yield on the bond as proportional to the amount of risk on the bond. Usually, long term bonds have higher yield -...
It's nothing magical. When you're looking to buy a bond, you can think of the yield on the bond as proportional to the amount of risk on the bond. Usually, long term bonds have higher yield - you're locking your money up for longer, after all, that's riskier, so you should get more reward for it.
If long term bonds have a lower yield than short term bonds, that means investors think that the future is less risky than the present. In other words, they think bad things will happen in the near future. This can be correlative with recessions.
But it's no more of an oracle than anything else any other market. The US Treasury bond yields, which are usually used as the bond of choice for its stability for this metric, does have an incredibly liquid and broad market, with not just institutional investors in the US participating, but the central banks of every large power in the world. That being said, they are just people, in the end.
It seems like a prediction that short-term interest rates go higher and then lower could mean a lot of things, depending on why the Fed raises interest rates and then lowers them? One scenario is...
It seems like a prediction that short-term interest rates go higher and then lower could mean a lot of things, depending on why the Fed raises interest rates and then lowers them?
One scenario is that inflation is still an issue in the short term, but the Fed finally declares victory. Alternatively, they overshoot, causing a recession, then drop rates to zero to compensate.
So maybe this is a consensus that higher interest rates aren't here to stay, without there necessarily being any consensus on why?
Yeah I think what we're actually seeing is an environment of significant long-term uncertainty, and that's generally going to be correlated to a recession but doesn't have to be. I suspect what's...
If long term bonds have a lower yield than short term bonds, that means investors think that the future is less risky than the present. In other words, they think bad things will happen in the near future. This can be correlative with recessions.
Yeah I think what we're actually seeing is an environment of significant long-term uncertainty, and that's generally going to be correlated to a recession but doesn't have to be.
I suspect what's actually happening here is that the world is in a state of profound geopolitical, sociological, and technological flux. So nobody actually knows where to park their money in the long term because we have much less of an idea about which of the seedlings we are planting today are likely to thrive and which ones will wither than we normally do. So it makes sense to think of the longer term as risky for any individual investment, hence the state of the yield curve, but in aggregate I don't make the assumption that this translates to aggregate risk for GDP output. We just have a weird moment where the returns to some investments will be enormous and others will be zilch, so the risk factor is high.
I have no clue what ultra-wealthy people might want. Why do you think they would like lower interest rates? Couldn't they buy bonds and get a guaranteed income?
I have no clue what ultra-wealthy people might want. Why do you think they would like lower interest rates? Couldn't they buy bonds and get a guaranteed income?
If you're talking ultra-wealthy (100 million+ gang), they really don't care. Once you're over a certain line, it's pretty much win/win for them. You have the ability to shift markets/mechanisms so...
If you're talking ultra-wealthy (100 million+ gang), they really don't care.
Once you're over a certain line, it's pretty much win/win for them. You have the ability to shift markets/mechanisms so much faster than anyone else that you're basically fine.
For example in a high interest environment, a lot of people are locked out of long term loans for investments. The average one is a house, but it's also a major thing for any small business. If you've got 100 million you can gobble up competitors/better locations while smaller fish are priced out.
In general, the ultra wealthy are playing a totally different game, and it's mostly influenced by their personal desires. People like musk never have to work again, and their family, friends, and their families would all be taken care of for generations. They continue to because they want something, and at that point you don't really care much about things like interest rates unless it's affecting your goals (and it could be positive or negative depending on the person and goals).
I see a lot of doom and gloom posts, but with rising interests rates and a resilient economy, it seems like recession is off the table. Inflation is now down 2.6% for the whole year as well,...
I see a lot of doom and gloom posts, but with rising interests rates and a resilient economy, it seems like recession is off the table.
Inflation is now down 2.6% for the whole year as well, hopefully people forget about the egg and gas prices being high for one month out of the year.
My grocery bill is still 2x higher than it was 4 years ago and I'm buying less nice things, my rent is still 2x as much as it was 4 years ago and the place hasn't gotten any nicer. My utilities...
My grocery bill is still 2x higher than it was 4 years ago and I'm buying less nice things, my rent is still 2x as much as it was 4 years ago and the place hasn't gotten any nicer. My utilities are still 40% higher than they were 2 years ago.
It's not "eggs and gas were high for one month" it's everything in people's lives has gotten more and more expensive with little to no wage increases to deal with it. Those increases didn't magically disappear because inflation is down, insane inflation already happened and the average American has no way to deal with it or reconcile the damage it's done to them.
I keep seeing references to the mythical average American not being able to afford anything. I'm just not seeing that play out. Unemployment is at a record low, driving up wages. Consumption is...
I keep seeing references to the mythical average American not being able to afford anything. I'm just not seeing that play out. Unemployment is at a record low, driving up wages. Consumption is through the roof, people are buying shit, and a lot of it. Housing is definitely a crunch, but not to the point where it has impacted how much people are buying. I feel like there's a lot of manufacturered doom based on feels rather than reals.
Average credit card debt is through the roof right now, higher than it's ever been. Consumption may be up but people don't have the money to actually pay for it and are indebting themselves...
Average credit card debt is through the roof right now, higher than it's ever been. Consumption may be up but people don't have the money to actually pay for it and are indebting themselves further and further to stay afloat. Just because it's not happening to you doesn't mean it's not happening.
Median inflation-adjusted wages seem to similar between pre-pandemic and now. So that means that the median person's income has more or less kept up with inflation. Looking at the second chart in...
Median inflation-adjusted wages seem to similar between pre-pandemic and now. So that means that the median person's income has more or less kept up with inflation.
Looking at the second chart in the article (FRED reference), if you plug the March 2020 value ($859B) into the BLS inflation calculator, you get $1014B for June 2023, which is higher than the actual value of $994B. Also, this is a total that doesn't account for population growth, which was ~1% between 2020 and 2023.
Then there's the last chart in your link that suggests that credit card delinquencies have also returned to pre-pandemic levels.
So, combine these bits of info, and they suggest that people aren't using credit cards more than before.
On the FRED website the 'Notes' section has descriptions and links to the sources of data used. In this case it's the Bureau of Labor Statistics. If you want to see the raw data or methodology,...
On the FRED website the 'Notes' section has descriptions and links to the sources of data used. In this case it's the Bureau of Labor Statistics. If you want to see the raw data or methodology, click around on the BLS site long enough and you should be able to find it.
Keep in mind that median just means that half of people are above this line and half are below. It's ok for getting a general sense of things, but by definition half of people are doing worse than this. So I don't want you think that I'm saying that no one is using credit cards more, just that it seems that people are not using credit cards more in general.
I haven't dug around enough to find the part time info you're asking for, but there is Average Hourly Earnings of All Employees, which has kept up with inflation too. Unfortunately, averages could be affected by a skewed distribution where a small number of super high earners move the average up.
Yeah, it's broken down by a lot of specific categories. See this BLS page or maybe this one. The past data is also available if you dig around, but there isn't always a nice chart for the data...
Yeah, it's broken down by a lot of specific categories. See this BLS page or maybe this one. The past data is also available if you dig around, but there isn't always a nice chart for the data series that you want, so you might have to do your own calculations for some of these.
Honestly, I have no idea who to ask. I'm just a regular person who's spent some hours poking around the BLS site for personal interest. I think basically all you would want to know is there if you...
Honestly, I have no idea who to ask. I'm just a regular person who's spent some hours poking around the BLS site for personal interest. I think basically all you would want to know is there if you look around hard enough. For example, since some data is based on surveys, you can go find the survey questions and read them yourself. To me the data feels less abstract if I know what they're actually asking people.
Personally, my spending has been somewhat on trend with the credit card usage chart. I used to go out to eat occasionally, go on one or two vacations a year, etc. so my credit card spending was higher. Then the pandemic hit, and my spending decreased. Now I'm starting to go back out more, so the spending has gone up as well. I pay off my cards in full every month, but having a higher average balance between payments will show in these stats, since they're compiled weekly. I know that my personal experience is just one of millions though, so I'm always looking to the stats.
I see singular data points and claims like yours, but the economy doesn't bear out that with any consistency. If the average American was like you- unable to afford the same lifestyle they did 10...
I see singular data points and claims like yours, but the economy doesn't bear out that with any consistency. If the average American was like you- unable to afford the same lifestyle they did 10 years ago- the market would not be red hot and there would not be an insatiable demand for labor to fill the demand bourne by consumers- that is, Americans.
Unions have been striking since their inception. It's what they do. It's one of their core bargaining tools. A union striking is in no way an indicator of the status of a national economy.
I'm not debating your particular situation, I'm debating that your particular situation is the norm for average Americans. I think you are in a below average position but you think you are average; if the average American was in your position, we would not be where we are today.
I'm not answer those questions because it's irrelevant busywork to answer them. It has no bearing on anything I'm saying. Everyone in this thread is positing that the average American is in an...
I'm not answer those questions because it's irrelevant busywork to answer them. It has no bearing on anything I'm saying.
Everyone in this thread is positing that the average American is in an incredibly poor place and crunched financially. My position is that cannot be reconciled with the state of the economy. It's essentially a Trump "people are saying" argument. "People are saying that the average American is going broke and cannot afford food or rent."
You denigrade me for not using data, and your data is "people on the internet are saying." You then end with a condemnation of relying heavily on data. It's not worthwhile for me to engage further...
You denigrade me for not using data, and your data is "people on the internet are saying." You then end with a condemnation of relying heavily on data. It's not worthwhile for me to engage further in this.
My measurement of the economy is that it's booming, and an economy doesn't boom if the participants are strapped for cash. That focuses entirely on how to measure workforce and labor statistics....
My measurement of the economy is that it's booming, and an economy doesn't boom if the participants are strapped for cash.
That focuses entirely on how to measure workforce and labor statistics. It's entirely possible that people don't have "good jobs," but the jobs they do have pay well enough for them to buy luxury goods.
This isn't exactly true. Inflation might have outpaced wages overall, but wage increases have been getting a 4-7% increase for the past couple of years now, and the increases have recently started...
everything in people's lives has gotten more and more expensive with little to no wage increases to deal with it
This isn't exactly true. Inflation might have outpaced wages overall, but wage increases have been getting a 4-7% increase for the past couple of years now, and the increases have recently started outpacing inflation. I wouldn't call that "little to no" increase.
The group who likely saw the most significant increase was minimum wage earners. Service industry jobs that were paying minimum wage at $7-8/hour have doubled. At least in my area (NC), it isn't common to see jobs starting under $13-15/hour now. It kind of makes arguments about minimum wage irrelevant (right now, anyways) since any with two brain cells knows that they won't be able to hire anyone for less than $15/hr nowadays.
And I totally acknowledge it's still not enough and many people are still struggling (this was the case pre-pandemic as well), but many "average" people are also still spending money (perhaps foolishly) on unnecessary luxuries and travel at a higher level than pre-pandemic, so there's no blanket statement to be made about the average American's financial situation.
Nobody seems to know whether the economy is good or bad, or whether it’s getting better or worse. I think means it isn’t all that bad? Could be worse. In retrospect, maybe it will look like a...
Nobody seems to know whether the economy is good or bad, or whether it’s getting better or worse.
I think means it isn’t all that bad? Could be worse. In retrospect, maybe it will look like a period of stability?
I really hope I don't come across as one of those dudes before the great depression shouting "everything is dandy!" but it really does feel like that US economy is resilient in a manner it wasn't...
I really hope I don't come across as one of those dudes before the great depression shouting "everything is dandy!" but it really does feel like that US economy is resilient in a manner it wasn't in say the 1970s. And this is just considering the domestic outlook. The US is kicking butt in comparison to a ton of western and non-western countries as well.
Two things have happened since the 1970s. One is that fracking was an unbelievably big deal for the US energy sector. The US went from a net importer of oil, and infamously the OPEC embargo caused...
Two things have happened since the 1970s. One is that fracking was an unbelievably big deal for the US energy sector. The US went from a net importer of oil, and infamously the OPEC embargo caused a supply side recession in the 70s, to a net exporter of oil. In fact, the US is one of the largest energy exporters in the world now - much of the new LNG Europe is consuming comes from the US. The "US bombs middle east for oil" isn't going to be a thing for the near future, at least.
The other is that the US found another massive industry to have a hegemony over: technology.
It just sucks with the interest rates this high. I want to move to a new home (for 1+ years now) but am completely stuck mainly because of the high rates. Then I see these [apparently] ultra...
It just sucks with the interest rates this high. I want to move to a new home (for 1+ years now) but am completely stuck mainly because of the high rates. Then I see these [apparently] ultra wealthy folks buying property over asking price like it's nothing.
The article talks about the inverted yield curve, which now apparently signals a 67% chance of recession looking 12 months ahead. That's higher than any time since 1982.
This isn't my area. I'm into fast trains, dense cities, and, like... cement. But the yield curve has always seemed like a descriptive metric. For me, these things are a matter of faith. Wondering how much to put into this.
It's nothing magical. When you're looking to buy a bond, you can think of the yield on the bond as proportional to the amount of risk on the bond. Usually, long term bonds have higher yield - you're locking your money up for longer, after all, that's riskier, so you should get more reward for it.
If long term bonds have a lower yield than short term bonds, that means investors think that the future is less risky than the present. In other words, they think bad things will happen in the near future. This can be correlative with recessions.
But it's no more of an oracle than anything else any other market. The US Treasury bond yields, which are usually used as the bond of choice for its stability for this metric, does have an incredibly liquid and broad market, with not just institutional investors in the US participating, but the central banks of every large power in the world. That being said, they are just people, in the end.
It seems like a prediction that short-term interest rates go higher and then lower could mean a lot of things, depending on why the Fed raises interest rates and then lowers them?
One scenario is that inflation is still an issue in the short term, but the Fed finally declares victory. Alternatively, they overshoot, causing a recession, then drop rates to zero to compensate.
So maybe this is a consensus that higher interest rates aren't here to stay, without there necessarily being any consensus on why?
Yeah I think what we're actually seeing is an environment of significant long-term uncertainty, and that's generally going to be correlated to a recession but doesn't have to be.
I suspect what's actually happening here is that the world is in a state of profound geopolitical, sociological, and technological flux. So nobody actually knows where to park their money in the long term because we have much less of an idea about which of the seedlings we are planting today are likely to thrive and which ones will wither than we normally do. So it makes sense to think of the longer term as risky for any individual investment, hence the state of the yield curve, but in aggregate I don't make the assumption that this translates to aggregate risk for GDP output. We just have a weird moment where the returns to some investments will be enormous and others will be zilch, so the risk factor is high.
I assume it's all wishful thinking from ultra-wealthy people who want interest rates to go back down.
I have no clue what ultra-wealthy people might want. Why do you think they would like lower interest rates? Couldn't they buy bonds and get a guaranteed income?
If you're talking ultra-wealthy (100 million+ gang), they really don't care.
Once you're over a certain line, it's pretty much win/win for them. You have the ability to shift markets/mechanisms so much faster than anyone else that you're basically fine.
For example in a high interest environment, a lot of people are locked out of long term loans for investments. The average one is a house, but it's also a major thing for any small business. If you've got 100 million you can gobble up competitors/better locations while smaller fish are priced out.
In general, the ultra wealthy are playing a totally different game, and it's mostly influenced by their personal desires. People like musk never have to work again, and their family, friends, and their families would all be taken care of for generations. They continue to because they want something, and at that point you don't really care much about things like interest rates unless it's affecting your goals (and it could be positive or negative depending on the person and goals).
I think most wealthy people prefer low or zero interest loans to bonds. But I'm no expert either.
Do you know what a joke is?
I see a lot of doom and gloom posts, but with rising interests rates and a resilient economy, it seems like recession is off the table.
Inflation is now down 2.6% for the whole year as well, hopefully people forget about the egg and gas prices being high for one month out of the year.
My grocery bill is still 2x higher than it was 4 years ago and I'm buying less nice things, my rent is still 2x as much as it was 4 years ago and the place hasn't gotten any nicer. My utilities are still 40% higher than they were 2 years ago.
It's not "eggs and gas were high for one month" it's everything in people's lives has gotten more and more expensive with little to no wage increases to deal with it. Those increases didn't magically disappear because inflation is down, insane inflation already happened and the average American has no way to deal with it or reconcile the damage it's done to them.
I keep seeing references to the mythical average American not being able to afford anything. I'm just not seeing that play out. Unemployment is at a record low, driving up wages. Consumption is through the roof, people are buying shit, and a lot of it. Housing is definitely a crunch, but not to the point where it has impacted how much people are buying. I feel like there's a lot of manufacturered doom based on feels rather than reals.
Average credit card debt is through the roof right now, higher than it's ever been. Consumption may be up but people don't have the money to actually pay for it and are indebting themselves further and further to stay afloat. Just because it's not happening to you doesn't mean it's not happening.
https://apnews.com/article/federal-reserve-credit-card-debt-interest-rates-a2e1d35cb957153058d188652570c48e
Median inflation-adjusted wages seem to similar between pre-pandemic and now. So that means that the median person's income has more or less kept up with inflation.
Looking at the second chart in the article (FRED reference), if you plug the March 2020 value ($859B) into the BLS inflation calculator, you get $1014B for June 2023, which is higher than the actual value of $994B. Also, this is a total that doesn't account for population growth, which was ~1% between 2020 and 2023.
Then there's the last chart in your link that suggests that credit card delinquencies have also returned to pre-pandemic levels.
So, combine these bits of info, and they suggest that people aren't using credit cards more than before.
On the FRED website the 'Notes' section has descriptions and links to the sources of data used. In this case it's the Bureau of Labor Statistics. If you want to see the raw data or methodology, click around on the BLS site long enough and you should be able to find it.
Keep in mind that median just means that half of people are above this line and half are below. It's ok for getting a general sense of things, but by definition half of people are doing worse than this. So I don't want you think that I'm saying that no one is using credit cards more, just that it seems that people are not using credit cards more in general.
I haven't dug around enough to find the part time info you're asking for, but there is Average Hourly Earnings of All Employees, which has kept up with inflation too. Unfortunately, averages could be affected by a skewed distribution where a small number of super high earners move the average up.
Yeah, it's broken down by a lot of specific categories. See this BLS page or maybe this one. The past data is also available if you dig around, but there isn't always a nice chart for the data series that you want, so you might have to do your own calculations for some of these.
Honestly, I have no idea who to ask. I'm just a regular person who's spent some hours poking around the BLS site for personal interest. I think basically all you would want to know is there if you look around hard enough. For example, since some data is based on surveys, you can go find the survey questions and read them yourself. To me the data feels less abstract if I know what they're actually asking people.
Personally, my spending has been somewhat on trend with the credit card usage chart. I used to go out to eat occasionally, go on one or two vacations a year, etc. so my credit card spending was higher. Then the pandemic hit, and my spending decreased. Now I'm starting to go back out more, so the spending has gone up as well. I pay off my cards in full every month, but having a higher average balance between payments will show in these stats, since they're compiled weekly. I know that my personal experience is just one of millions though, so I'm always looking to the stats.
That indicates carried debt is decreasing from its COVID peak.
I see singular data points and claims like yours, but the economy doesn't bear out that with any consistency. If the average American was like you- unable to afford the same lifestyle they did 10 years ago- the market would not be red hot and there would not be an insatiable demand for labor to fill the demand bourne by consumers- that is, Americans.
Unions have been striking since their inception. It's what they do. It's one of their core bargaining tools. A union striking is in no way an indicator of the status of a national economy.
I'm not debating your particular situation, I'm debating that your particular situation is the norm for average Americans. I think you are in a below average position but you think you are average; if the average American was in your position, we would not be where we are today.
I'm not answer those questions because it's irrelevant busywork to answer them. It has no bearing on anything I'm saying.
Everyone in this thread is positing that the average American is in an incredibly poor place and crunched financially. My position is that cannot be reconciled with the state of the economy. It's essentially a Trump "people are saying" argument. "People are saying that the average American is going broke and cannot afford food or rent."
You denigrade me for not using data, and your data is "people on the internet are saying." You then end with a condemnation of relying heavily on data. It's not worthwhile for me to engage further in this.
My measurement of the economy is that it's booming, and an economy doesn't boom if the participants are strapped for cash.
That focuses entirely on how to measure workforce and labor statistics. It's entirely possible that people don't have "good jobs," but the jobs they do have pay well enough for them to buy luxury goods.
I'm making about 15k more than I was 4 years ago and budgeting is definitely harder and we have less and less available for fun things.
This isn't exactly true. Inflation might have outpaced wages overall, but wage increases have been getting a 4-7% increase for the past couple of years now, and the increases have recently started outpacing inflation. I wouldn't call that "little to no" increase.
The group who likely saw the most significant increase was minimum wage earners. Service industry jobs that were paying minimum wage at $7-8/hour have doubled. At least in my area (NC), it isn't common to see jobs starting under $13-15/hour now. It kind of makes arguments about minimum wage irrelevant (right now, anyways) since any with two brain cells knows that they won't be able to hire anyone for less than $15/hr nowadays.
And I totally acknowledge it's still not enough and many people are still struggling (this was the case pre-pandemic as well), but many "average" people are also still spending money (perhaps foolishly) on unnecessary luxuries and travel at a higher level than pre-pandemic, so there's no blanket statement to be made about the average American's financial situation.
Nobody seems to know whether the economy is good or bad, or whether it’s getting better or worse.
I think means it isn’t all that bad? Could be worse. In retrospect, maybe it will look like a period of stability?
I really hope I don't come across as one of those dudes before the great depression shouting "everything is dandy!" but it really does feel like that US economy is resilient in a manner it wasn't in say the 1970s. And this is just considering the domestic outlook. The US is kicking butt in comparison to a ton of western and non-western countries as well.
Two things have happened since the 1970s. One is that fracking was an unbelievably big deal for the US energy sector. The US went from a net importer of oil, and infamously the OPEC embargo caused a supply side recession in the 70s, to a net exporter of oil. In fact, the US is one of the largest energy exporters in the world now - much of the new LNG Europe is consuming comes from the US. The "US bombs middle east for oil" isn't going to be a thing for the near future, at least.
The other is that the US found another massive industry to have a hegemony over: technology.
It just sucks with the interest rates this high. I want to move to a new home (for 1+ years now) but am completely stuck mainly because of the high rates. Then I see these [apparently] ultra wealthy folks buying property over asking price like it's nothing.