The Economy in Decline

02-15-24
02/15/2024

It Soon May Be Time to Help your Family and Friends

In Communism Family and Friends Come Together and Help Each Other Out as the Government Bears Down. Of Course, the Rats Turn on the People, But Who Needs Rats when Everyone Clutches a Cell Phone.

In January real wage growth, or wages adjusted for inflation, turned negative after a string of seven months where supposedly wage growth outpaced inflation. Of course the Bureau of Labor and Statistics manipulates inflation down, so realistically, wages likely haven’t kept up at all but the situation is deteriorating. So, when the government admits your paycheck is falling behind, it’s time to worry more:

Real wage growth in the US just turned negative for the first time in 7 months, down 0.1%.

We saw negative real wage growth for the majority of 2021 through mid-2023 as things began improving.

All of a sudden, real wage growth took a complete turn while inflation came in above… pic.twitter.com/eSiGd319Nc
— The Kobeissi Letter (@KobeissiLetter) February 14, 2024

This is unfortunately consistent with the 4% annualized jump in inflation during the 3 months ended January.

Meanwhile, as reported by the New York Fed in their February report, and pertaining to the population of New York State (but which bodes poorly for the nation):

Delinquency & Public Records

. . . . Delinquency transition rates increased for all product types, except for student loans. Annualized, approximately 8.5% of credit card balances and 7.7% of auto loan balances transitioned into delinquency. Early delinquency transition rates for mortgages increased by 0.2 percentage point yet remain low by historic standards.

About 114,000 consumers had a bankruptcy notation added to their credit reports in 2023Q4, slightly less than in the previous quarter. Approximately 4.7% of consumers have a 3rd party collection account on their credit report.

Credits cards and auto loans act as a canary in the coal mine as struggling families tend to stop these payments before they stop a mortgage payment. This report indicates about 8% of these loans fell into delinquency during the 4^th quarter of 2023 – that’s a big number.

Next, let’s check if tax returns may give people a little extra cash to cover some payments. According to US Treasury data as reported by Zerohedge, “[Bank of America] calculated that tax refunds are down 57% YoY in the first two weeks of tax refund season (ending Feb 9).

Well so much for the refund.

As further indication that the healthy GDP number is false, government tax receipts plummeted 6.2% on a 12-month basis – people and businesses paid less because they earned less. Let me remind you, there were no new tax cuts applicable to 2023.

Yet yesterday the S&P 500 Stock Index closed at a very lofty 5,000 continuing a relentless rally – Things are looking great? – it seems the stock market reflects the matrix.

Let me close with some more January sentiments and data from Peter Schiff:

U.S. retail sales plunged .8% in Jan, the biggest monthly drop since the Covid lockdowns, even as retail prices continued to rise. Meanwhile, import and export prices both spiked .8%. This confirms the economy is cooling down just as #inflation is heating up. This is Stagflation.
— Peter Schiff (@PeterSchiff) February 15, 2024

Industrial production and manufacturing output both fell in Jan. Less production means lower supply. Meanwhile government is fueling demand with deficit spending and the #Fed is still too loose in enabling consumer credit. These policy mistakes mean 2% #inflation is a pipe dream.
— Peter Schiff (@PeterSchiff) February 15, 2024

It is time to pray and time to vote out Biden and all the communists.