CNBC: 28% of credit card users are still paying off last year’s holiday debt

Gaius · 2024-10-22T15:18:47.732Z

biggestal99:

people are still spending money.

Well one possibility is that people believe their leaders and their leaders are (lying to them) saying “Everything is great! Now get out and spend, spend spend!”

On this forum I can’t resist mentioning that possibility.
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More likely, the spending levels are K-shaped.
Your aggregate numbers look good because the top is doing very very well,
but when we disaggregate we see the bottom 50% is hurting more than usual.

For households $0-60k spending is not up. It is flat since 2023, in fact flat since pandemic. (Zero growth in 4 years, but mounting credit card debt. Pretty bad, huh?)

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SOURCE:

federalreserve.gov

A Better Way of Understanding the US Consumer: Decomposing Retail Spending by...

The Federal Reserve Board of Governors in Washington DC.

Impenitent · 2024-10-22T15:28:34.480Z

credit cards don’t base your credit limit on 5 zillion times your income level

somehow the federal government does

biggestal99 · 2024-10-22T15:50:10.648Z

Gaius:

More likely, the spending levels are K-shaped

so the upper crust hasnt changed its spending habits, but the lower crust has.

obviously since PCE is up.

Allan

e7alr · 2024-10-22T17:08:42.046Z

Is the PCE increase being driven by demand, or by inflated current prices. Are we spending more and getting more, or are we spending more and receiving less in return for that spending.

biggestal99 · 2024-10-22T17:15:22.431Z

e7alr:

Is the PCE increase being driven by demand, or by inflated current prices

is adjusted for inflation. its a real increase in personal spending in the 3q2024.

Allan

Gaius · 2024-10-22T19:15:55.304Z

Adjusted for inflation,
Households making $0-60k are spending exactly the same as 2022 and exactly the same as pre-pandemic.

100% of spending growth is coming from families making more than that.

Eagle-Keeper · 2024-10-22T20:01:10.549Z

Gaius:

biggestal99:

people are still spending money.

Well one possibility is that people believe their leaders and their leaders are (lying to them) saying “Everything is great! Now get out and spend, spend spend!”

The reality is that when it comes to spending money all to many people are completely irresponsible and simply rack up credit card debt. So not only is our economy and GDP built on government debt but also consumer debt.

e7alr · 2024-10-22T23:25:25.261Z

Hard to believe that it is an increase of anything more than increased costs. It definitely isn’t across all economic demographics. Defaults are up, disposable income is down for the lower and middle income portion of the population.

biggestal99 · 2024-10-23T10:15:47.284Z

e7alr:

Hard to believe that it is an increase of anything more than increased costs

the facts however are there. people are spending more money as @gaius has pointed out however not increasing among the poor.

Allan

Gaius · 2024-10-23T12:16:32.731Z

biggestal99:

among the poor.

Good!
You’re getting it, but “not increasing” includes all households making $60k a year or less, which is approximately half of all households.

NOTE: it works out to $30/hour.

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biggestal99 · 2024-10-23T15:25:56.519Z

Gaius:

Good!
You’re getting it, but “not increasing” includes all households making $60k a year or less, which is approximately half of all households

median household income for the united states in 2023 was $80,000
not 60,000.

so its less than half.

Allan

e7alr · 2024-10-23T21:45:19.521Z

You just can’t be that deluded about that you are saying. Might as well be telling the lower income to eat cake.

biggestal99 · 2024-10-24T16:36:47.033Z

e7alr:

Might as well be telling the lower income to eat cake.

poor people spending was flat inflation adjusted.

no more no less.

the growth came from the high income people who made oodles of cash in the market. people who own stock are spending more money.
people who dont arent

Allan

biggestal99 · 2024-10-24T16:37:50.766Z

biggestal99:

poor people spending was flat inflation adjusted.

no more no less.

the growth came from the high income people who made oodles of cash in the market. people who own stock are spending more money.
people who dont arent

Allan

poor people need to pull themselves up by the bootstraps.

Allan

e7alr · 2024-10-24T18:22:56.214Z

You Democrats need to stop pushing them back down.

Gaius · 2024-10-24T19:03:54.075Z

biggestal99:

poor people spending was flat inflation adjusted.

no more no less.

the growth came from the high income people who made oodles of cash in the market. people who own stock are spending more money.
people who dont arent

Allan

Now you’re getting it.
Now you’re focusing the truthful message.

Meanwhile . . . guess how the lower end (households under $65k comboned income) are still spending as flat-much as they used to? (hint in the thred title)

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CNBC – 6 Feb 24

Credit card debt hits a 'staggering' $1.13 trillion. Here's why so many...

Strong consumer spending boosted credit card balances to a new record high in the fourth quarter, according to the Federal Reserve Bank of New York.

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The good news is this is deliberate and can be halted if saner people get in charge.
It is deliberate policy to lower rates etc. in order to keep consumer spending high/
(You know, because people maxing out their credit cards to get the same amount of stuff is a good thing.)

biggestal99 · 2024-10-24T20:35:36.993Z

e7alr:

You Democrats need to stop pushing them back down.

have an idea. get funding. and start your own business. buy stock in companies.

there are tons of ways to make it in America.

Allan

biggestal99 · 2024-10-24T20:36:59.209Z

Gaius:

The good news is this is deliberate and can be halted if saner people get in charge.
It is deliberate policy to lower rates etc. in order to keep consumer spending high/
(You know, because people maxing out their credit cards to get the same amount of stuff is a good thing.)

i will agree that using CC without a repayment plan is a bad idea.

Allan

Gaius · 2024-10-24T20:40:36.240Z

biggestal99:

Gaius:

The good news is this is deliberate and can be halted if saner people get in charge.
It is deliberate policy to lower rates etc. in order to keep consumer spending high/
(You know, because people maxing out their credit cards to get the same amount of stuff is a good thing.)

i will agree that using CC without a repayment plan is a bad idea.

Allan

And . . . to the government’s credit, it does not actually force people to spend more.
but there is an ARMY of Economists in govnerment and in the ivory towers who study and study “Hmm. What can we do to make consumers spend more? Let’s see. everytime we do “A” spending rises and savings fall so let’s help the economy by doing a whole lotta ‘A.’”

(They’ve come up with some pretty sophisticated models to “help” the economy this way.)

Toll_Collector · 2024-10-24T21:44:48.624Z

You could be right. I’m just not sure. People are stupid with their money just in general. I’m not sure the government has much to do with it. They are the reason I still have a job while all others in my field are going by the way of the dinosaur.