Talker Research (formerly OnePoll US) reported that six in ten Americans believe the U.S. economy fell into a recession 15 months ago, and they don't think the recession will end until mid-2025.
Head fakes in the major media
Today's “fake news” reporting that jobless claims and continuing jobless claims fell by 7,000 and that retail sales recorded their biggest increase in more than a year in July should not distract us from reality: the Federal Reserve's determination to squeeze the U.S. economy so-called “to fight inflation” (which the Fed itself created) is succeeding.
Reuters put the best possible face on today's unemployment report, saying the “orderly market slowdown continues,” suggesting that “the labor market is slowing as companies cut hiring.”
As the currency's purchasing power inexorably declines, consumers are cutting back on spending at clothing stores, sporting goods stores, hobby stores, music stores, bookstores and more.
Even MSNBC, which denies the talker's reporting, acknowledges that “many Americans are struggling with rising prices for everyday items, with most having exhausted their savings and now turning to credit cards to make ends meet.”
According to the New York Fed, one in 10 people are already behind on their credit card payments, and “more middle-income households expect to struggle with debt payments in the coming months,” MSNBC reports.
Vishal Kapoor, senior vice president at loan-services firm Affirm, said confidence in the U.S. economy is at a “rock bottom” and consumers are “desperately looking for ways to take control of their finances.”
Retailers feeling the impact
The downturn has already taken a toll on major players in the U.S. economy. Corne's, the 134-year-old retailer, will close all of its more than 550 stores in October, resulting in the loss of 4,000 jobs.
Family Dollar, a unit of Dollar Tree, announced plans to close more than 1,000 of its 8,000 stores when leases expire, and Big Lots, a retailer in business for more than 50 years, said in a regulatory filing that the economic downturn has left it with “significant doubts” about its ability to continue operating.
Home Depot issued a warning after sales fell about 4% last quarter as customers cut back on spending on major home-improvement projects. The retail giant initially predicted a 1% to 2% decline in sales over the next 12 months, but has now lowered that forecast to 3% to 4% over the next 12 months.
Larger companies like McDonald's, Starbucks and Disney have reported similar impacts as consumers pull back on spending.
Global outplacement firm Challenger, Gray & Christmas reported that U.S. retailers have laid off 460,000 workers so far this year, with more layoffs expected in the future.
On August 1, the New American reported:
Hiring activity is declining, job openings are declining, unemployment is rising, bankruptcies are mounting, major retailers are closing hundreds of stores, credit card delinquencies are increasing, and mortgage rates are at record highs, negatively impacting the housing market.
You can safely ignore the fake news in today's reports that the media is touting as evidence of the success of Biden economics in the run-up to the presidential election. The question is the American consumer: How is your economy doing? Answer: Bad. And it's likely to remain that way for at least another year.
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