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U.S. Economy Grew at 4.9% Rate This Summer, Powered by Fast-Spending Americans
- mupuff1234 3y agoWho are these "fast spending Americans" and what exactly are they spending more on?
- belltaco 3y agoCredit card debt is at a high, for one. https://www.wate.com/investigations/retail-credit-cards-apr-reach-record-high-as-us-credit-card-debt-exceeds-1-trillion/ https://www.wate.com/investigations/retail-credit-cards-apr-...
- giantg2 3y ago"A recent Bankrate survey found that 47% of credit cardholders carry a balance month to month. 60% of those carrying card balances have been in credit card debt for at least a year." This sounds pretty scary. But I also wonder what they mean by retail credit cards. Does that include retailers who offer 24 months interest free on a big purchase when opening the card?
- jvanderbot 3y agoProbably. I think a year of interest free payments is smart, but not if you have several maxed out cards, and high overall debt to income ratio. Debt to income would probably be a better metric?
- caseysoftware 3y ago> * Does that include retailers who offer 24 months interest free on a big purchase when opening the card?* Yes, it would because that's an ongoing/carried balance. And you're right.. a better analysis would be: how many people continue carrying a balance after their introductory rate goes away? Because retail credit cards have the highest rates by far: > The average retail credit card annual percentage rate (APR) hit a new record high of 28.93% this year, up from 26.72% in 2022 and 24.35% in 2021, according to Bankrate’s annual Retail Cards Study out Monday. 28.93% APR is well above the national average, which clocks in at 20.71% Ref: https://www.foxbusiness.com/economy/retail-credit-card-rates-hit-record-high https://www.foxbusiness.com/economy/retail-credit-card-rates...
- discardedrefuse 3y agoDon't forget about the most insidious aspect of these retail cards. Once that promotional no-interest period expires, your balance gets hit with all the accrued interest from the promotional period. So, anyone thinking of taking advantage of these promotions take heed: Pay off the entire balance before the promotion expires!
- jbaber 3y agoThis makes that debt really hard to measure. These debt bombs that retroactively make you have carried a balance for years in the past. Don't include them: you're missing all the people who transform into high debt carriers. Include them: you sweep in all the people who set an automatic payment to pay it off with a couple months to spare and forget about it.
- caseysoftware 3y agoTo further complicate things, the entire "Buy Now, Pay Later" industry does NOT report to credit agencies, etc until someone is late on payments (not sure how many days late). Therefore, there's an entire pile of debt that also is invisible to these metrics.
- tshaddox 3y agoThere are also a lot of headlines about the average car payment being at a record high, well over $700 per month: https://money.com/average-car-payment-record-high/ https://money.com/average-car-payment-record-high/
- slantedview 3y agoWould love to see a chart of average car payments to income ratio.
- stouset 3y agoThat’s depressing, particularly given the recent trend of car loans having longer and longer terms, disposing with the conventional wisdom of no greater than three years.
- cheriot 3y agoCredit card debt as a % of disposable income is similar to pre-covid https://fred.stlouisfed.org/graph/?g=1aFmn https://fred.stlouisfed.org/graph/?g=1aFmn Most of the "consumer debt reaches all time high" events are explained by a larger economy and inflation making the numbers bigger than 2019.
- grej 3y agoProbably all Americans to some degree, and sure they're spending more but with rampant inflation, they're definitely not buying more.
- amanaplanacanal 3y agoThat number is already adjusted for inflation.
- ben_jones 3y agoAffirm, Klarna, and other services for deferred payment are just credit card debt in a different form. They’re used to encourage impulse buys like expensive event tickets. Seriously go to an expensive event like the Cowboys v 49ers game or Taylor Swift concert and look around. It’s not a bunch of millionaires pow wowing around.
- kylebenzle 3y agoMy net worth went up like 20% this month with Bitcoin Cash. Maybe there are a lot like me?
- notac23 3y agoAnd this will reverse as soon as student loan payments kill the last of people's savings.
- sghiassy 3y agoCollege educated adults have a higher earning potential than non-college-educated adults. They also come from higher socio-economic backgrounds. I have opinions about this policy but I’ll leave them for another forum
- a_wild_dandan 3y ago> College educated adults have a higher earning potential than non-college-educated adults. This isn't true.[1] [1] https://www.nytimes.com/2023/09/20/podcasts/the-daily/is-college-worth-it.html https://www.nytimes.com/2023/09/20/podcasts/the-daily/is-col...
- SantalBlush 3y agoCould you point to the part of your link where the above claim is refuted? I don't see it.
- a_wild_dandan 3y agoAh, my bad. Here's a quote from the transcript: > But when they looked at young people who were born after 1980, in the 1980s and 1990s, their wealth benefit was much smaller. And for certain cohorts, for Black and Latino-headed families, that college wealth premium had disappeared altogether. So a college grad wasn’t amassing any more wealth over their lifetime than a high school grad. Essentially, total income ≠ total lifetime earnings. Wealth is what people really care about when comparing (non)college wages. Fact is, college is a big gamble now. For more explanation, read past the cited quote. (Or listen to the entire podcast, if you can! It's really interesting!)
- gameman144 3y agoYour linked article doesn't propose that the earning potential of college graduates isn't higher, it just states that people think the tuition price might not be worth it. College educated adults absolutely have a substantially higher earning potential on average.
- darth_avocado 3y agoIt wasn’t “fast spending”, it was spending on necessities, but the necessities cost 60-70% more. It’s not like people have more money to spend, most of this is borrowed spending that people are forced into. Cc debt chart I bet is skyrocketing. And household savings are probably declining at a fast pace.
- jsnell 3y agoDupe: https://news.ycombinator.com/item?id=38025177 https://news.ycombinator.com/item?id=38025177
- giantg2 3y agoAnd yet the debt is growing faster, expected to be at an all-time high 107% by 2029. Edit: Why disagree? I think it's important to see the whole picture and not just the parts we want to see. https://finance.yahoo.com/news/us-cant-grow-way-33-021833651.html https://finance.yahoo.com/news/us-cant-grow-way-33-021833651...
- fuoqi 3y agoFueled by rising public and private (credit card) debt.
- test77777 3y agoIt’s be expected in a period of >0% inflation, most of that debt is going to be valued less in 100 years so it’s best to take it on now before the economy booms again and inflation gets back up to 70s-80s levels.
- caseysoftware 3y agoIf you're using that debt on productive or appreciating assets, that's a good perspective. Is that what individuals and governments are spending the money on?
- fuoqi 3y agoEven the government pays above the (current level of) inflation and it has to refinance a big chunk of its debt in the next 1-3 years. Personally, I highly doubt the government spending is efficient enough for this. As for the average Joe, card debt is really expensive (20+%). You will not get repeat of the 70s with the current debt levels and aging population, so your bet is effectively a hyperinflation scenario.
- DrThunder 3y ago[dead]
- lalaland1125 3y agoThis is quite an interesting "recession"
- spaceman_2020 3y agoAll the anecdotal evidence I get is all topsy turvy. Unemployed brother who works in tech tells me he's now got recruiters reaching out to him again. Friends who work in tech sales say that they're struggling to sell. Everyone in general keeps complaining about prices and inflation. Every city keeps breaking home price records. I don't think anyone understands this market or even this economy anymore.
- deleted 3y ago[deleted]
- Der_Einzige 3y agoGenerative AI is responsible for a significant portion of this growth no matter how badly folks here may not want to admit it.
- spaceman_2020 3y agoUmmm...how?