American Economics Thread
- Thread starter Bernard
- Start date
Misleading Growth.
First, the labor market. Recent monthly nonfarm payrolls data exceeded consensus expectations in the first estimate. This gave the stock market a reason to rally.
But the total job number is misleading. Since February, the U.S. economy has added 671,000 jobs, two-thirds of which came from less dynamic sectors, including healthcare, government, and education.
In June, the Bureau of Labor Statistics' payroll diffusion index for the private sector fell below 50, meaning more sectors are shedding jobs than gaining them. This is a rarity outside of a recession.
Research by Peter Berezin, chief global strategist at BCA Research, suggests that the U.S. labor market is close to the point where any further drop in demand could significantly increase the unemployment rate.
There are also concerns about the quality of employment data, in part due to declining survey response rates. Monthly jobs were overestimated by an average of 75,000 in 2024.
Indeed, the string of initially better-than-expected employment data this year was revised downward in subsequent estimates. (The revisions, however, are less noticeable by the market.)
Second, the housing market. "Real estate is the most interest-rate-sensitive part of the economy and, as such, has historically driven the economy into recessions," says Mark Zandi, chief economist at Moody's Analytics. "That hasn't happened so far, but with rates remaining stubbornly high, the situation could change."
Thirty-year fixed-term mortgages have been common, and the share of new adjustable-rate mortgages has also fallen sharply since the late 2000s. This means that the effects of higher interest rates may take longer to affect the real economy (and the data).
But now they are having an effect. First-time buyers are allocating a larger portion of their median income to mortgage payments than at the peak of the housing bubble in 2006. The proportion of outstanding mortgages with rates above 6% has increased in the post-pandemic period.
The inventory of unsold new homes has also risen to its highest level since mid-2009.
Third, consumption. After driving post-pandemic growth in the United States, real monthly consumer spending has been falling since December 2024.
Low-income households were the first to be hit: first by high interest rates, and now by price increases linked to tariffs and broader economic uncertainty.
But so far, overall spending has been sustained by wealthy groups—the top 20% (earning more than $250,000 annually) account for more than 60% of personal spending, according to Zandi.
Fourth, the stock market. The S&P 500 has become increasingly disconnected from real economic variables over the past decade, making it a less useful indicator of the U.S. economy.
Couldn’t have put it better myself. The real economy has been in a downward spiral since the second half of 2022 but the powers that be continues to gaslight people about it.
Part 38:
Moody's downgrades credit rating, and Treasury yields continue to rise...
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Existing home sales in the US have fallen again. In fact, we just witnessed the slowest April since 2009...
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Existing home sales are falling, although both active listings and new listings are increasing...
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Most young potential homebuyers have been completely driven out of the market. Surprisingly, the average age of a home buyer in the US has reached an all-time high of 56…
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The average age of first-time homebuyers is also increasing…
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According to a recently released report by the Ludwig Institute for Shared Economic Prosperity, the true unemployment rate in the US was 24.3%…
Part 39:
According to Gene Ludwig, you can literally “be homeless and in a tent community and have worked one hour” and be considered “employed” by the federal government…
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Inflation is one of the main reasons why consumer sentiment in the US reached its second-lowest level on record…
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The number of homeless people in the US is at the highest level on record, and the state of California is leading the way…
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Due to current economic conditions, nearly a quarter of the U.S. population is "canceling plans to make a major purchase"...
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"Silent layoffs" have become a major trend in this country. In fact, a recent survey found that 53% of American companies “are using silent layoffs to layoff employees by 2025”…
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The real estate market continues to be in crisis. Right now, the total dollar value of unsold homes on the market is at an all-time high...
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In the first five months of this year, US employers announced 80% more job cuts than in the first five months of last year…
Part 40:
The US economy needs to create approximately 150,000 jobs per month just to keep up with population growth. Unfortunately, the monthly ADP report shows that the US economy lost jobs last month. Private sector employment fell 33,000 in June, the first decline we've seen since 2023...
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In particular, service jobs are being eliminated at an alarming rate…
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According to the latest report, American employers announced a total of 744,308 job cuts during the first half of this year. The last time we saw a higher number was in the early days of the pandemic, in 2020...
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According to Challenger, Gray & Christmas, retail job cuts during the first half of 2025 were 255% higher than in the first half of 2024…
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And the chief economist at Moody's Analytics is warning that the numbers being given to us by the government itself are becoming increasingly unstable...
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The value of the currency has now fallen for six consecutive months, and there are reports that the US dollar is "suffering its worst start to a year in more than five decades"...
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And the currency is getting weaker and weaker, and that means they are losing purchasing power more and more…
Part 41:
According to the New York Times, the price of ground beef in the US has increased 16.2% in the last 12 months…
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Right now, livestock numbers in the United States are “the lowest since 1952”…
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Nearly two-thirds of the country lives paycheck to paycheck…
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UPS has decided to eliminate approximately 20,000 jobs...
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According to Axios, 15.6% of Americans currently face food insecurity. Unfortunately, this number has almost doubled since 2021…
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For example, demand at a food bank network in Philadelphia has increased 120% in the last three years…
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If all was well, U.S. store closures wouldn't be on track to set a new all-time high this year...
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Condo sales are falling particularly quickly…
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The condo bubble has officially burst, and prices are now plummeting in markets that were once considered very hot…
Part 42:
The U.S. once had the largest and most prosperous middle class in world history. But, according to the Pew Research Center, the percentage of Americans considered "middle class" is much lower than before...
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Today, many Americans are just surviving from month to month. In fact, a recent survey found that 48% of Americans are "constantly financially stagnant"...
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In fact, a recent survey found that 40% of US adults now have at least one side job…
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The federal government is already spending so much money that the national debt is on track to reach $54 trillion a decade from now…
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Even a vacation that lasts just a few days can leave you deeply in debt...
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Over the past five years, U.S. home prices have risen at a rate of nearly 10% per year…
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Health insurance is also getting a lot more expensive…
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The situation is so bad that approximately a quarter of the U.S. population is using “buy now, pay later” loans to pay for everyday expenses...
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According to a recent survey, nearly 70% of the population is experiencing “anxiety and depression” because of their finances…
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For example, here's one that found that "65% of middle-income Americans believe their income hasn't kept up with rising expenses"...
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And the same survey found that 80% of middle-income Americans rate the economy poorly...
No offense, but are these true? I don't know much about the US economy, and these articles look like the American version of the theory of national collapse.
