NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Phil Kerpen with American Commitment notes that even though some measures are improving, the economy is still not as strong as it was a few years ago.
"The main reason that people are still experiencing the economy so negatively, of course, is that incomes have still not caught up to prices," Kerpen said. "We just had the 2023 income data come out, and there were a bunch of stories trying to sort of celebrate and say how wonderful it is that we had positive real income growth for that year. If you look at the real income data, we still haven't reached 2019. We're still below where we were before the lockdowns, about $600 below for the median household income."
People are used to rising incomes as they gain experience in their jobs.
"They're used to being able to buy a little bit more each year than they were the year before," Kerpen said. "People don't feel that they're getting ahead economically. They feel that they're still behind. Other data bears this out. We've seen a big rise in consumer debt, credit card debt in particular, and we're seeing delinquencies rise now. We've got a situation where, you know, people get towards the end of the month and they either need to go without things they used to be able to afford, or they need to put them on a credit card and carry a balance."
Unemployment has been going up, though slowly.
"Traditionally, that's been one of the metrics that the Federal Reserve looks at indicating that a recession is coming, I think that's why they suddenly moved so aggressively to cut interest rates. It's not because they actually conquered inflation and it's all clear, and now they can ease up. It's because they think we're headed for a recession and they're trying desperately to avoid it. But those efforts usually fail, unfortunately."
Kerpen also said he's worried about the combination of recession and inflation, which is called stagflation and happened most notably back in the 1970s.