Something’s off. And it’s making life downright unpleasant for a broad cross section of Americans.
The average worker, after putting in his 40 hours a week, is coming up short. Cash outflow consistently exceeds cash inflow. Debits overwhelm credits. How could this be?
The unemployment rate, according to the Bureau of Labor Statistics, is 3.5 percent. This is near a record low.
With everyone working and earning an income, shouldn’t consumers be fat and happy? Shouldn’t they be paying down their debts and paying off credit card balances each month? Shouldn’t they be squirreling away a few nuts for the winter ahead?
In reality, consumers are struggling to make ends meet. Households are spending more money than they’re bringing in. Their finances are being stretched to the breaking point.
For example, seasonalized rates of severe delinquency for auto loans are the highest they’ve been in 17 years. Severely delinquent loans, if you’re unfamiliar with the term, are loans that are more than 60 days past due. Defaults are more than 90 days past due. Continue reading