As balance rise, so have delinquencies
Consumers are close to being tapped out.
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I dunno. But I do not believe we only have 2 more small interest rate hikes in our future. It would seem the US economy has become a juggernaut. Reining it in will take quite a bit more than that to rein it in. It will be interesting to see what the inflation rate is. Can a surging economy have low inflation? What say ye.
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A surging economy can have manageable/acceptable amounts of inflation. I think the 80’s and 90’s would bear that out. Yes, yes, the 80’s started in the dumpster with high inflation and 10+% unemployment, but really, who remembers that? I believe they came to call it “The Go-Go 80’s.” Disinflation, good everything else. The 90’s? As I recall: good economy overall. That Bill Clinton bogossity about the early 90’s being the worst economy since the depression/it’s the economy stupid." Strictly made for TV political palaver. And inflation was getting even lower!
We’ve had two years of high inflation (8-9%). Apparently, while I would have jacked rates higher faster, what the Fed is doing seems to be working. I think a couple more years of 4% inflation but going in the right direction along with smaller rate increases can easily be accomplished.
That’s hardly crippling inflation. There’s no absolute need to cause higher unemployment if it can be avoided. Altho, if it goes up 1-1.5% that’s still what they used to call “Full employment.”
It’s like teaching your 4 year old to ride a two-wheeler. You run behind the bike to avoid the big spill but as herky-jerky as he looks trying to steer and pedal he’ll probably stay upright and eventually steady himself. Let Junior do the driving, he’ll be fine.
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Me. Graduated high school in '81 and had to find a way to support myself and put myself through college. Was almost impossible to get a full time job, as companies figured out it was cheaper to hire 3 part timers and not give them benefits. Finally, one of my (3) part time jobs got me hired full time with benefits. That at least brought me to the poverty line. Took me 10 years to get my college degree.
There was one job I had to think long and hard about, before turning down. When you are earning $3.35/hour and are told you can make $500/night tax free, you can’t help but think about it.
My experience was a strong factor in having a house with a separate apartment. If our kids ever needed a fall back position they had one. Youngest graduated college in the midst of Covid and lived there rent free for a year, without complete loss of independence, until he finally got a decent paying job that allowed him to pay his own way fully. He used to give me such a hard time for asking him what his fall back position was if his plans went south, but that year he expressed thanks for my being so @nal and always prepared. I sure didn’t anticipate Covid, but in life $hit happens. I knew that and was ready.
IP,
remembering how pleased I was December 2019, that with only one semester left to school for Youngest, surely neither of our kids was going to start their work life under the awful economic conditions I experienced…oops
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And I graduated law school in 1981. Was told that with my grades I would likely get multiple job offers from firms. I got zero. My low paying job as an inner city prosecutor turned out well in the long run because I parlayed my jury trial experience into a career as a trial lawyer but it was a rough start. Student loan debt , low pay, 16 percent mortgage on first home and family to support.
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Inparadie & iampops5:
Interesting personal stories. Of course I remember the early 80’s! Two other people I know:
A) Older bro. Later in life chronically un or under employed. I asked him once during a long layoff probably in the 90’s: So how the hell did you manage in the 1975-1985 time frame? He said he had no problem getting jobs. He was not highly skilled labor or degree’d either. He’d quit because he could and was always able to get whatever job he wanted (within his sphere, of course.) That surprised me.
B) Me. I could see that whole economic drama coming in high school. I had no assets, no resource, no preparation, and I guess unlike you guys, no real dreams either. Like what was worth flogging myself through college for? I needed out of a bad situation. None of that “struggling young artist / young man with a dream” thing for me. Work. Job. Money. ANY money! Let’s go. I joined the Air Force as a stop gap measure and since the world wasn’t changing fast enough, kept the bird-in-hand and didn’t bother with the bush. Other than the expected low pay in the early years, I was largely insulated from the worst of that econo-catastrophe. But I remember it. That’s why I did what I did.
When I said “but who remembers that?” I meant the world healed pretty fast and we all moved on and in a few short years, poof…! it was the go-go 80’s. Today’s “mini-econo-catastrophe” will pale by comparison
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The punitive policies of supply side econ left 60% of American workers making less than $40k per year in 2019. The roots of that experience are in 1981.
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