Is the economy cracking harder than Humpty Dumpty? 🥚 What was he doing hanging out on that wall, anyway? Was it attached to the local pub? Were the king’s horses and men the first responders of the nursery rhyme universe? 🚨🐴 We must know.
While you ponder those questions, we’re pondering over the scrambled egg economy. 🥴 Let’s look at the mixed signals we’re getting and swallow down some gas station truth pills.
Here’s Five Fast Facts on what’s going on in the U.S. economy:
- 🏘️ Home Sweet Home - If you’re a first-time homebuyer, chances are you’re shelling out a bigger portion of your paycheck than first timers of the past. Today, the mortgage payments of a first-time homebuyer take up more median income than those who first bought homes in 2006. Mortgage rates above 6% have also been climbing since the COVID days.
- 📈 Stock Boy - Our current stock market might be all bark and no bite. Over the years, the S&P 500 has become more and more out of touch with reality. For example, stock in the “Magnificent 7” companies (big tech) has grown larger than our country’s GDP. However, value is largely based on how well they can perform in the future. What happens if the crystal ball is wrong?
- 🏢 On the Job - Jobs numbers are also throwing the market for a loop. The stock market loved the recent non-farm payroll numbers, but we have to look under the hood. Sure, hundreds of thousands of jobs may get created, but where? Most of these new jobs are in healthcare, education, and government, not super-charged, economy boosters.
- 💼 Sticky Stats - While we’re chatting about jobs numbers, June intel from the Bureau of Labor Statistics showed that more private sector jobs are cutting more than they’re hiring. That’s typically something we only see in a recession. And then there’s the question of how reliable jobs numbers are overall. Last year’s revisions were pretty crazy, with estimates off by 75,000.
- 🛒 Bye Buy - When we look at American consumers, the top 20% of earners typically make up 60% of total spending. However, this is changing, thanks to economic uncertainty. We’re also at the beginning of the tariff story. Depending on the impact of price increases, we could see spending go way down. Don’t forget: many Americans are draining their emergency funds and relying on credit to keep up with rising costs of living.
🔥Bottom line: Word to the wise: you don’t need to wait for a talking head to tell you we’re in a recession to start cleaning up bad financial habits. Keep your head down, replenish your emergency fund, and chip away at those credit card balances. Need a bit of good news? The U.S. reported a budget surplus in June. Head to this article for the breakdown.
Is the economy impacting your household finances?
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