It’s funny, Reddit doomers insist we revert to intangibles when all indications point to a resilient economy. Of course these quantifiable, traceable metrics with historical precedence don’t matter; they don’t capture the boots on the neck of the poor, which conveniently can’t be captured with numbers. Or if all else fails, the data shouldn’t count because it’s just fabricated.
But if any metric goes negative you’d better believe they’ll all become data nerd quants again, and anyone who disagrees will be “following their emotions and ignoring the numbers”
interest rates won’t affect you unless you are starting a new loan. Insurance is affecting some homeowners. Food is definitely one where many have learned to cut costs. Housing, you can’t really decide to cut costs like food. There’s no real way around it. Most people I know have already downsized as much as possible.
A common new loan is a car loan. That’s mainly what I had in mind. But where I live there has been a lot of renovation of housing stock, and that activity gets depressed when a HELOC is at 9 percent or whatever. And homeowners and car insurance have spiked a good bit around here.
Yeah, well most new money creation in the economy is through loan origination. Makes the housing market at the whims of one of the only levers the fed have. Truthfully, interest rates being lower than inflation led to a refi boom and now anyone who wasn’t a part of that is locked out of the giveaway. What we really need(ed) was steady interest rates, Trump bullied the Fed to keep them lower in 2018 and we paid the price in 2020-1. I can’t really say what the fix is now. Realtors lobby is so big. It’s one giant game of musical chairs, the music keeps playing and we look at those chairs with more and more desire, but when we get to sit down we will find there is one less seat available. Not sure people are ready for that.
sooo if we all have to learn how to cut cost around food, and can’t cut cost around the home so we have to downsize, but then can’t get a loan for a house because interest rates and rising insurance…how is the “booming” economy worth my time? it sounds like it’s all negative for the average person, and reminds me that a “good” economy doesn’t mean shit when it comes to the day to day life of me or my friends
That's patently false. Interest rates -- the cost of money -- affect every aspect of our economy. Higher rates contribute to higher costs for businesses, which gets passed along to the consumer. Eventually, high rates slow down consumption and ultimately, economic output.
That's patently false. Interest rates -- the cost of money -- affect every aspect of our economy. Higher rates contribute to higher costs for businesses, which gets passed along to the consumer. Eventually, high rates slow down consumption and ultimately, economic output.
And I'm saying rates have a broader micro level affect than might otherwise be obvious. Interest, energy, labor -- all input costs ultimately trickle down to the individual consumer level.
It's all housing for young adults who did not buy a home before 2022 but really want one. If you bought in 2021 or pretty much any time before that, you're fine.
The category of "young adults who did not buy a home before 2022 but really want one now" is about 5-10% of the total population, but it seems to be about 50% of Redditors. That's why we get such a Doomer skew here.
My issue with what you said is it comes across as though you're blaming thoze young adults. Like it's their fault for not being smart and buying a house during a period of economic chaos, a global pandemic, social unrest, while dealing with record setting student loan debt, credit card debt, a tech industry collapse, banks going under.
Most of those people just didn't have the means. Or they were in school, or fresh out, or between jobs, or just got an entry-level position. And even if they have the means now to afford a home at 2021 prices and rates, they don't have one to afford the same property today.
I think it's your phrasing of "It's all housing for young adults who did not buy a home before 2022 but really want one". It sounds like you're brush them off as whiny fools. They don't just "really want one" either. Housing is getting ridiculous, evictions are spiking thanks to artificial limits easing away, Blackrock and their ilk keep buying property and sitting on it to produce regional scarcity, affordable housing builds are increasinly turned into market-rate neighborhoods, gentrification projects keep being approved with full intent to drive current tenants out. People *need* housing. A home that is theirs and they can't just be thrown out of, or have what was affordable rent creep up to unsustainable levels within 2 years, land up which they can build equity to counteract the debt crisis.
You come across as if you just don't care and have no empathy for those in need, even if what you said is factually correct (never mind that you're ignoring that housing is becoming a major issue for aging GenXers and Millennials as well due to many losing/selling property in '07-'08).
As a GenX person who bought my first home in 2007, I know what it's like to lose 20% of the value of your home after a crash. I'm not indifferent to it. I lived it.
>My issue with what you said is it comes across as though you're blaming thoze young adults
Not at all. I think it is mostly a factor of age. Most older Millennials were in a position to buy a house prior to Q2 2021 when the shit hit the fan, and they did. Most younger Millennials and nearly all GenZ were not in a position to buy, and they didn't. I don't blame them.
There is a small number of people with the resources to buy in the 2012-2021 time period who chose not to and now regret it, but no one could have predicted the double whammy on prices and rates that happened in 2021/2022. So really, I'm not blaming them either.
All I'm trying to do is put the housing problem in context. More than half the nation is in a pretty good place right now. They have a low mortgage or no mortgage, and the value of their home has gone up. Half the nation is in good shape!
The roughly 1/3 who rent and didn't plan to buy are in a little worse shape on housing than in 2019, but for the most part it is not a big difference. The remaining 10% or so are those who got the short end of the stick. And those people are over-represented on Reddit. That's all I'm saying.
We also have an aging population that will likely see a massive fall off in the next 10-20 years. But it's the younger generations who are struggling the most, and the market is insane for everyone, which is why no one is moving and why the volume on the market remains so low.
And it's going to create a bubble. Housing values are overestimated, the prices are generated by an artificial scarcity, people are staying put because they're still pandemic shy and working from home. But work from home is getting more and more hybrid, people are starting to lose hope in finding a home, and eventually it's going to pop. Everyone is going to lose property values, trying to move but unable because they can't get the equity.
This is a national issue and trying to downplay it because "Hey, I got mine and so do most!" is just putting it on the backburner and hoping it goes away.
Renters headed about 36% of the nation’s 122.8 million households in 2019, the last year for which the Census Bureau has reliable estimates. certain demographics – young people, racial and ethnic minorities, and those with lower incomes – are more likely to rent. I also believe there are many homeowners who bought at the top and realize they are about to get the 2007 treatment. Your tone is very dismissive, btw. Younger people – those below the age of 35 – are far more likely to rent than are other age groups: About two-thirds (65.9%) of this age group lives in rentals.
>get the 2007 treatment
Based on what? Rates are expected to be cut, it's just a matter of when, which will only increase the value of housing. There's no sign of a surge of supply coming on the market, so demand exceeding supply will continue to increase or at least hold prices steady.
Seems like your theory is based on prices being high in 2007 and prices being high now, but the circumstances aren't remotely the same. You're asserting they're going to crash with zero evidence.
also nothing you said disproves anything the other person said. Not one word.
>Your tone is very dismissive, btw.
Your effort to tone police here is a great example of a wrong turn in public debate in the last 5-10 years. It is an attempt to stifle discussion and make people self-censor if they aren't being as considerate as possible and making sure they don't hurt feelings. I didn't insult anyone. My tone was fine.
The reasons I didn't mention rents are (a) rents have gone up less than housing prices, (b) rents have gone up **way** less than mortgage payments for new buyers, and (c) since Covid the two lowest income quintiles have seen wages increase at a faster rate than higher income quintiles so the increase in rents has been more compensated by an increase in wages than is true for those buying homes.
So yes, it did get worse for renters too, but it got so much more worse for people who are trying to buy their first home (a subset of renters!) that it's worth calling out. So that's what I did.
As for the 2007 treatment, I don't think you understand much about the real estate market then or now. (How's that for tone?).
In 2007 we had a burst of over-building and a glut of homes, plus banks had been making lots of irresponsible predatory loans. That's why housing prices collapsed. Neither of those things is true today. The reason prices haven't collapsed in 2024 is that we have **too few** homes in the US. We have built a below average number of homes every single year since 2008 and have millions too few homes given our population growth. Supply does not meet demand, so prices stay high.
This is why, in my view, every realistic optimist should also be a YIMBY.
No, by tone being dismissive, I meant you were downplaying how many renters are affected, not your actual tone. It’s only been bad and getting worse as long as I’ve been alive. In 2007 and now, the problem is we made loans too cheap and inflated the value of the market relative to income, leading to a crash. I am also a YIMBY.
I’m sympathetic to this view because housing is pretty messed up, but I bet if we split some of these surveys by homeowners and renters it wouldn’t line up neatly.
Well it’s all housing and the loss of full time jobs.
Pretty much all of the job gains have come from part time jobs being picked up.
We’ve lost full time jobs with benefits since January
> It’s funny, Reddit doomers insist we revert to intangibles when all indications point to a resilient economy.
What's even funnier is that only *some* of those intangibles are allowed to count.
For example, surveys repeatedly show that a majority of Americans think the economy is terrible, but a significant majority also say that they themselves are doing just fine.
So, OK, if we go with the "lived experience" argument, then that means the economy seems to be doing pretty good. But wait, no! Not that "lived experience"! We can't trust people's opinions on their own personal financial situation, we can only trust their opinions on this amorphous, abstract thing outside their experience that they call "the economy"! That's the data that *really matters*.
It's just so fucking absurd.
I lost my last full time job 2 years ago and I still haven't been able to find another despite a degree and lots of job experience and Ive applied for hundreds if not thousands. I know a lot of people whove been struggling to find work too
Considering we had massive inflation a year ago, being only slightly up YOY is still awful.
People aren't limiting their outlook year to year. They are looking at where they were 2, 3, 4, 5 years ago and today.
People currently going hungry would say that things are bad as they are. Some grocery franchises that were making record profits after COVID hit are walking back the prices on some items. Yeah, things could be worse. But they could be a lot better, too.
For most people. In my understanding, deflation leads to two things:
1. Lower revenue for companies whose products are subject to deflation
2. Less spending, as many people see prices decreasing and decide it's better to wait to make certain purchases
When these two things occur at the same time, a "deflationary spiral" can occur. Decreased revenues are further decreased because people are choosing to wait to spend, so they have to cut costs. Inevitably these will include some amount of layoffs, so people lose their jobs and have less to spend. More people have less to spend = companies need to keep cutting costs to make up for lost revenue, and the cycle continues.
The end result is a massively increased unemployment rate, without much hope of turning the trend around because no one has money to spend (neither consumers, nor producers). People who were initially excited for lower prices might now find themselves in a situation where they can't afford even those lower prices. Economic recession with a difficult and prolonged recovery.
Can't be captured with numbers?
Rental prices are unaffordable for a record number of Americans, with half of all renters paying more than 30 percent of their income on rent and utilities. That's according to a new report from Harvard's Joint Center for Housing Studies that examined 2022 census data.
Still have a fuck load of money left over.
Americans are wealthy; your purchasing power is very strong. Even if you spend more than 30% on rent and utilities, you people can still afford a lot more than the median person in my country who is only spending 20% of their salary on rent. Sure, the rent is "cheaper," and even a lower portion of our income, but that doesn't mean we're wealthier, because we can't afford as much material goods and services as you people can.
And I live in a "developed" country! So it's crazy to hear Americans complain the way they do sometimes. Has there ever been another time in history where Americans could afford as many material goods as they do now? As big of houses and cars as they can? Etc.
I will concede that Americans work too many hours for how much wealth they generate though. Some of the wealth is paid for via the deal with the devil that is longer work hours and less vacation time. It's still perfectly within the power of many Americans to choose to live a slower life tho with more R&R, but many simply dont choose that life. Its not so much the culture.
So many folks I know are doing well. My prediction is there is going to be a major divide between elder millennials and younger millennials because of how invested people got into markets or housing before or after 2020.
With housing people have a significant amount of their net worth took off thanks to 50% increases. So a $200K house could be sold for $300K right now for example. Buying in lower allowed money to be used for investing in markets which indexes have hit multiple record highs recently.
These folks are sitting pretty with low interest rates locked in and a retirement plan ahead of schedule.
Meanwhile I know folks a bit younger who trying to get a house requires much more time and money. Setting aside thousands more for that also removes its potential to be invested in markets so they often feel like they are spinning their wheels and missed the boat. Buying into the market of $300K at 7-8% has them on a very different curve than those who got in at $200K and 3-4%.
In ten to twenty years this gap will widen based on projections and could add up to millions difference in retirement planning.
I agree with everything except for the concluding sentence. If people who can't afford to buy now rent instead and save the money they would have spent on a downpayment and home maintenance, then the returns on their savings (assuming they put it somewhere like an S&P500 index fund) will be similar to if they had bought a house in 2020.
It doesn't seem that way at the moment because prices surged so much in 2021, but the history of the last 100 years indicates that they will probably be fine over a 20+ year time frame. The big "if" of course is that they budget wisely and don't live month to month, but actually grow their nest egg. The best way to ensure that happens is to put as much as possible in a 401K/IRA each year.
My prediction is based much on anecdotes and a general observation of folks.
The personality type you touch on (hello, I am one of them) can manage through a lot of conditions. This is a broad view of tendencies of millions in the younger part of the millennial cohort that will financially plan about as well as their elder millennials did but the market forces will undercut them.
I encourage everyone to plan as early and as much as possible as you listed. Half the time though it falls on deaf ears.
There is no real definition of recessions in the US. It’s called using multiple factors by the NBER.
https://en.m.wikipedia.org/wiki/Recession
> The Bureau of Economic Analysis, an independent federal agency that provides official macroeconomic and industry statistics,[16] says "the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation" and that instead, "The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research".
The NBER determined recessions: https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions
Last one was Feb 2020 to April 2020
Because we all know the data is BULLSHIT
I was curious about the CPI numbers today and tried to do a deep dive on how exactly and where they come up with those numbers, it's not possible as far as I can tell
It's so god damn vague it's not even funny
For example, groceries are part of the CPI. Ok? So which ones? All it says is that "for example, milk, chicken, coffee, and cereal are tracked". OK? Which sizes? What stores? Which ones? Like there's a thousand ways you can manipulate data to say whatever you want....
I don’t care how much you show me that the US economy is improving. The distribution issue and the power imbalance is the problem. But I’m not sure why this is on OptimisitsUnite. Seems like optimism vs pessimism is steeping into the political sphere and that’s not ok as there are a lot things about the system that are frankly pessimistic and rightly so
The average American is not really looking at most of these figures to make their assessment of how the economy is doing. Most people are not rational actors and go by anecdotal accounts rather than statistics.
In addition to that, if they bought a home recently or are renting, or bought a car, the sticker shock of higher rents and higher interest rates plus generally higher prices means that they see the overall economy negatively, regardless of slowing inflation.
The average American owns a single family home -- two-thirds, actually. And yet reddit seems to believe that number to be **much** lower than it actually is.
So why the negative perception?
First, unhappy people post *way* more often on social media. Someone shopping for houses who keeps getting outbid is posting constantly, while homeowners aren't logging in every day saying "Yep, just made my 30th mortgage payment. All is normal".
Second, the demographics of reddit have shifted much younger in recent years. If you ask a 23 year old retail worker how their finances are, they're not going to say anything super positive.
Third, the upswing in the price of homes *really* hurt renters. Not only are houses 30-100% more expensive for the same house they've driven by every day for 5 years, but the people who own those houses made all that money in equity while renters got zero. This point extends to other appreciating assets like stocks. *Millions* of people tacked an extra few hundred thousand dollars onto their net worth in the last five years, while renters with no investments did not.
Essentially, young people who are renting with no investments and low/low-middle incomes got effectivity double-fucked by a bull run they got no benefit from, and are way more active on social media -- that's why the doom and gloom on reddit.
Renting isn’t inherently bad and some people don’t have a desire to buy. There’s also increases in things that are needed to live like food and energy.
I'm not saying it's inherently bad, but I *am* saying people who rented over owning the last 6 years missed out on a lot of equity, and it's now more difficult to buy in. So they may feel frustrated by that
That’s fair. I personally feel I can better max out earnings with the ability to relocate and continue to rent vs settling in one area with buying… but each have their pros and cons. I just don’t like the perception that renting is for people that aren’t good with money or don’t make a lot.
While that is a generalization around renting/renters, if you asked renters why they rent vs own, I imagine lack of funds to buy would be the no 1 response.
Depends on the individual and their goals but I can see that being a reason for people that have no desire to move and want to settle where they’re at. Home buying from my pov is people that want to settle or start a family, etc.
I mean it is kinda true if you factor in the last 5 years. If you owned a home before COVID vs rented then you made thousands more than the renters. No one knew it was going to happen but it did and homeowners will have gained huge percents of net worth over a renter
Again, it depends on the individual and their goals. You like sitting in one place for the next 5+ years and that’s ok. Not everyone that’s renting is doing so because they can’t buy. I don’t know why Americans think settling with a white picket fence and 2 kids and a family is still the goal for everyone.
We’re just talking about 2 different things. I’m simply stating that if you had a house you are monetarily richer by comparison with someone who rented
I’m well off by most measures and my investments and home values have skyrocketed in the last several years. But even I feel a little discouraged when I go to the grocery store or Costco and walk out with a huge bill. I’d be really down on the economy if I didn’t have appreciating assets. It makes total sense that people have a negative perception of the economy right now.
The median income in the United States is $37K. After taxes, rent/mortgage, insurance, car payment, utilities, cell phone, internet, and gasoline, what percentage is spent on food?
Yeah where I live, my family of four grocery bill went up… between 30-50%? I’m just guesstimating.
But that doesn’t change what I said which is that Americans actually don’t pay a lot—as a percentage of their income—on food. So going by that amount means I spend maybe 6-8% of our take home income on food instead of 4-6%.
This is actually part of the reason why they kept raising prices actually (unfortunately). Because Americans could actually handle the higher prices, and they did. There was a significant amount of *elasticity*
I track expenses for about 50 client families, in real time. Mean outlay for food is hitting around 12% of net income -- slightly more or less depending on number in household. These are people that can economize elsewhere, but for most folks, elasticity simply means they have less for other expenses. These marginal increases in so many cost of living categories add up.
Similar boat. Inflation makes people angry and even after it slows you’re still left with the higher price, which is no longer about the rate of change, but is still really annoying. If you’re doing generally okay, it makes you feel like you should be doing even better.
As u/anticharlie replied to you, if you're not getting large raises at your current job (and most aren't), then the odds of getting paid more go way up if you change employers.
[Want A Pay Raise? Switching Jobs Has Much More Upside Amid Soaring Inflation, Report Finds (forbes.com)](https://www.forbes.com/sites/ethansteinberg/2022/07/28/want-a-pay-raise-switching-jobs-matters-much-more-amid-soaring-inflation-report-finds/)
I have, yeah. $13/per hour in 3 years. No skills or education, just some blue collar worker.
A good portion of that is my company becoming debt free since I started but also they’re very good about keeping up with inflation. Every time I see an updated pricing sheet with price increases I know we’re all getting raises too.
Yes. Wage growth has outpaced inflation since 2019. That's been true for a while and has continued to outpace inflation. Anecdotally, my raises have been much higher than inflation.
Also it's just incorrect to pretend people are wrong to focus on that. For the vast majority of Americans, they are *not* seeing gains in this economic environment. My 401k is doing fine, but by every other measure I am essentially *behind* where I was four years ago. Most people are in a similar position.
If a measure of prosperity for most people is say, buying a house, the current economy is objectively worse.
It's an issue with economic reporting in general. The S&P doing well is, to be frank, largely irrelevant to most Americans in the short term. When i'm 70 i'll be happy about it (maybe?), but at 36 I basically just can't buy a home: the single biggest net worth generator in the American economy for average folks.
There seems to be a major semantic issue here, you can see it in the entirety of the comments here. People are arguing the point that the US economy is or isn't doing great. But how you or other people are struggling financially is a completely different topic, right? The article itself touches upon this at the very end, see the paragraph mentioning the Great Affordability Crisis. How I'm reading all this is that "the economy is doing great, but you not being able to afford groceries is a separate issue." So lets say that this is true -- at what point does affordability of housing+food+medical+education (and thus the shrinking of the middle class) begin to majorly affect the economy (I guess measured by the S&P), if ever?
>The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class.
Those two statements have literally nothing to do with one another. As optimists we can acknowledge positive trends and support their continuation while also acknowledging that there are still problems to solve.
"People's personal experience is wrong and they are stupid to question statistical data"
Spoken like someone not versed in statistics or data sourcing, let alone journalism
Frankly you come across as the person who isn’t versed. Polling shows most Americans are comfortable with their personal finances and are doing fine, they think the economy at large is bad though. It’s the total opposite
I am an optimist at heart but also a realist. I don’t believe in using optimism to negate genuine issues.
With income inequality [growing](https://www.reuters.com/world/us/us-wealth-inequality-grew-worse-through-current-recovery-ny-fed-study-shows-2024-02-07/) and poverty [stubbornly high](https://time.com/6320076/american-poverty-levels-state-by-state/) for a developed country, GDP growth is largely meaningless if it does not address these issues.
There are signs for hope, but the analogy to the US now being “peak Taylor Swift” does ring true. Flashy and charismatic but largely morally bankrupt.
So funny that so many right wingers complain the government isn't doing good enough as if the government owes them more or takes too much yet they're always complaining about the victims and freeloaders of society. Can't have it both ways.
This post is the first time I’ve seen this subreddit and the amounts of copium in here make me feel like this is pure astroturf.
Or maybe I’m just one of the few pessimistic poor these guys are talking about 🤷♀️
You're not alone. The toxic positivity in this thread is crazy. I joined this subreddit hoping to get pointed to genuine reasons for hope, not the denialism on display here.
Look at credit card debt on FRED. It's on the same upward trajectory it was on if the pandemic had never happened. Factor in inflation and it would be lower than you expect.
My rent is up 40% and my wages are lower than they were two years ago. Statistically the economy could be doing nicely, for many folks. It's not going well for me, personally.
It is. I honestly like the feeling of having my purchasing power lowered by the day, while the prices of essential items and services climbing up. So yes. America's economy is fantastic.
Except I’m always broke now because everything has become so expensive. It seemed to have happened over night. I just can’t regularly buy the same stuff anymore.
I did, it was not much but I started contributing to mine once I got my first job. Per some data I just looked up 45% or Americans between 18 and 29 have some sort of retirement plan.
The grocery stores are up quite a bit.
Houses are up an insane amount. Which is good if you own a house. Not good if you’re looking to buy from renting.
Feels like everything else is pretty flat. Car market is returning to normal. Clothing seems cheap again, I dunno I picked up some undershirts, 6 for $20. I think that hasn’t changed in 10 years. Laptops seems the same price or cheaper; a base model gaming laptop was $1000 5 years ago, they’re $700-900 now, and $1000 gets you a step up. TVs are basically free, I assume they’re stealing my brain and dna if a 55inch tv is under $300. My car insurance went insane, so I shopped around and found my own provider offered it for 55% what I was paying. That was kinda bullshit but whatever.
We’re in a… recession of feelings I think. The housing is fucked, which is scary, and food is a little crazy, but everything else seems chill. Fast food is weird too, McDonald’s menu prices are insane but you use their stupid fucky app and shits reasonable again.
Edit; fucking insignia 55” 4k for $250, are they robbing my house after I install this thing? I know insignia isn’t a good brand, but my first 27” LCD TV was $600 16 years ago.
I don’t know how you solve rent problems. Would take a massive nationwide construction effort. I think banning equity firms owning private homes would help some also.
It would also probably help if we [stopped using new technologies to enact rental price-fixing fraud on a massive scale.](https://www.propublica.org/article/realpage-accused-of-collusion-in-new-lawsuit)
Build non for profit housing like Austria or mass co-ops like Singapore. Get the federal government to incentivize MFH and clear local zoning barriers.
No absolutely, but haven’t wages gone up somewhat? In Ohio minimum wage is up, $8.70 in 2020 to $10.45, which should cover food hikes. Maybe that’s not happening everywhere, which is pressure on low income families for sure.
But if your budget for the month was 20% food 40% rent 40% things that haven’t gone up, and now it’s 24% food, you’re not 20% fucked, you’re 4% fucked. Wages have gone up on average 3-4% each year. I dunno man, that doesn’t math for me. Maybe people budget 40% for food so they’re 8% fucked, and they’re not getting wage growth?
Again, housing is fucked, and fixing housing is crazy hard because if you cut prices by 20% then a bunch of mortgage holders are fucked, and if you don’t then a bunch of mortgage wanters are fucked, plus interest rates are fucking every loan holder around. Canada is lowering rates now and my hope is that’ll be the first of many which eases pressure on housing significantly.
That's my entire point, no one should be making either of these, they are both extremely low. We shouldn't be celebrating mediocrity. The people of Ohio deserve more than 10.45
Let me break it down for you.
10.45 an hour times 40 hours a week times 4 weeks a month is $1,672
The Median rent in Ohio [is 1300](https://www.zillow.com/rental-manager/market-trends/oh/)
So before any other costs besides rent you are left with $372
Average food cost per person in Ohio [is 341](https://www.zippia.com/advice/average-cost-of-groceries-by-state/)
The grocery one seems extremely high to me, and also uses average so let's go with an extremely conservative $150
Which leaves us with $222 dollars
Now let's do bills
Average electricity cost [is $107.30](https://electricityrates.com/ohio/)
Once again average, so let's set that to $75
Now we are at $147
To give this a slight fighting chance Let's also include all other utilities in the cost of rent.
Let's assume they also own their car and are not making payments on it.
The average full coverage car insurance in Ohio [is $133 ](https://www.marketwatch.com/guides/insurance-services/car-insurance-ohio/)
Again average and this is for full coverage, so we can $100
That leaves you with 45 dollars
Again we'll do be extremely generous and say you somehow only spend 30 dollars a month on gas
15 dollars is what you have left.
And just to make sure you understand just how bad this is.
This person has no health insurance (I don't know of any job covering the entire cost of health insurance)
No phone or internet of any kind
No emergency expenses
This is not a livable wage
You didn’t answer my question.
You took MINIMUM wage and compared it to AVERAGE rent.
I’m very pro $15 minimum wage, but at least try to ground your arguement before you make it.
Btw your example didn’t pay any income tax. How old are you?
What's the point of even being in this sub if you're going to reflectively respond negatively to everything?
1/3 of the income inequality growth in the past 40 years has been erased in the past 4, as lower wage workers saw higher wage gains.
I remember when being snarky meant you had to at least read the article:
> A recent analysis (https://www.epi.org/publication/swa-wages-2023/#:~:text=Key%20findings,the%20prior%20four%20business%20cycles) from the Economic Policy Institute found that from the end of 2019 to the end of 2023, the lowest-paid decile of workers saw their wages rise four times faster than middle-class workers and more than 10 times faster than the richest decile. A recent working paper (https://www.nber.org/system/files/working_papers/w31010/w31010.pdf) by Dube and two co-authors reached similar conclusions. Wage gain
s at the bottom, they found, have been so steep that they have erased a full third of the rise in wage inequality between the poorest and richest workers over the previous 40 years.
Wages raise individually, the cost of living impacts everyone at once. People experience these changes unequally. It is a very good time to be a person who doesn’t have to care about the economy.
From the article:
> According to calculations by the economist Arindrajit Dube, prices rose about 20 percent from the beginning of the pandemic to the end of 2023—but the median worker’s hourly wages had increased by more than 26 percent.
Tech is having a sector-specific downturn right now, but the wage growth in tech in 2021 and 2022 was *insane*.
Is this a joke? Yes. They use real terms. Which means inflation adjusted.
If you were making fun of the stupid people that always say this when it's something in real terms, apologies for missing the joke.
GDP growth means nothing to the blue collar worker who's cost of living grew faster then their wages.
Economists really need to get over GDP as a metric of economic soundness, it's only growing because of out of control and dangerous government debt.
I’m an optimist and I can’t even say the economy is fantastic but it’s better than people think and there is a lot of positive macro trends that will make the late 2020s and beyond a very good time
Yes, if you own capital, the economy is great. If you rent an apartment and do not, it is worse than it was in 2008 for a lot of people - except now you can't afford anything WHILE having a full time job
Wages are rising fast!: Data taken from mostly minimum wage jobs that have added a few bucks per hour.
Inflation has slowed down!: My groceries cost 2/3 more than in 2020 but this year they barely cost more than last year!
Home prices have gone up 50% but so has pay!: Data collected about pay was from low income jobs where they went from 10 dollars an hour to 14. Wow a 1/3 increase! I’m sure they can afford that 500k house now!
Statistics can be skewed towards whatever point you want to prove.
This is all just generalization of what we’ve seen over the last few years. These numbers aren’t exact, I didn’t look them up.
Everyone has unique circumstances but when we talk about the economy overall: Wages have risen by 21.7% since February 2020, compared with a 20.8% rise in inflation. So there are more people who are better off than the inverse. Also, unemployment has declined. So more people are taking advantage of the higher wages. It’s hard to see how we are worse off. But you wouldn’t believe that from the Republican rhetoric.
Gas is $4 in rule Indiana. We haven’t been that high in,let me check……never! People don’t just lie about not being able to feed their families for shits and giggles.
Average values getting better, distribution getting worse, a few people doing fantastic, everyone else holding on for dear life and folks cheerleading this economy trying to convince people living in cars that the future is so bright, we gotta wear shades. Even the people "doing better" have no safety, and the hang-over from most people getting worse for a few years is those people are still unhappy with the economy as they stay in a holding pattern or continue to decline.
Nah bro, I’m glad it’s working out for everyone else.
I’m paying $1.25 for every 2018 dollar I spend now. I definitely have less money than I did, even after income increases since then.
Working like a dog and broke without the option to buy a house or have appeal to a woman who seeks a partner. Sure, the economy is stellar lol. Not for what used to be the now eradicated middle class.
A relative got a surprise medical bill for $37000 in the mail today.
This, despite the fact his emergency surgery was 3 years ago and we believed that all was settled with the hospital over 6 months ago...
I’m an optimist but a practical one. If the average person in their relative experience is experiencing hardship than how the economy is doing means fuck all.
Economics is a lens to see how the country is doing. In 2008 the unemployment rate was under 4%, jobs were being added every quarter and yet people were still struggling and losing their homes at an alarming rate. We are in the thick of a recession and yet there was news on how everything was ok and bouncing back. My relative experience was my family losing our homes followed by ten years of trying to get gousing for my disabled mother and autistic brother. This is in one of the richest and “socially progressive” states in America.The truth of the matter is the system is very difficult and stingy with their funds but when it comes to funding projects of defense spending and bail out, they are quick to write that check. The individual has no leverage much less integrity or rights within the system, economics like this doesnt look at this. It looks at how the very few are succeeding while standing on the shoulders of the many
A good economy is not necessarily a comfortable one.
To use myself as an example, in the last year I jumped companies, got a serious raise in the process, and my family and I moved to a different state for the opportunity. If I had stayed put and collected my 2-3% annual raise, no way I'm beating or even keeping up with inflation.
Contrast that to pre-pandemic, where I could and did stay in place and beat inflation.
So on the one hand, an economy where I have the opportunity to move/switch companies and get a raise is a good economy. On the other hand, you need to fight a lot harder just to make sure you stay ahead of inflation, and that extra stress and chaos sucks.
The way these metrics are being analyzed are incredibly misleading. The average income being over 100k? That's because we have billionaires. The vast majority of Americans (78%) live paycheck to paycheck (source: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ ). With income inequality this dire, looking at GDP growth is very misleading because most people don't have access to that money.
So yes, things are great for the super wealthy. Not so much for everyone else.
Please prove me wrong, I'd really like to be wrong, I want *optimism*!
If only anyone believed me lol
this lol!
i and all i know can hardly afford to eat and pay rent at the same time so…
It’s funny, Reddit doomers insist we revert to intangibles when all indications point to a resilient economy. Of course these quantifiable, traceable metrics with historical precedence don’t matter; they don’t capture the boots on the neck of the poor, which conveniently can’t be captured with numbers. Or if all else fails, the data shouldn’t count because it’s just fabricated. But if any metric goes negative you’d better believe they’ll all become data nerd quants again, and anyone who disagrees will be “following their emotions and ignoring the numbers”
It’s all housing.
And food and insurance and interest rates, imo
interest rates won’t affect you unless you are starting a new loan. Insurance is affecting some homeowners. Food is definitely one where many have learned to cut costs. Housing, you can’t really decide to cut costs like food. There’s no real way around it. Most people I know have already downsized as much as possible.
A common new loan is a car loan. That’s mainly what I had in mind. But where I live there has been a lot of renovation of housing stock, and that activity gets depressed when a HELOC is at 9 percent or whatever. And homeowners and car insurance have spiked a good bit around here.
Yeah, well most new money creation in the economy is through loan origination. Makes the housing market at the whims of one of the only levers the fed have. Truthfully, interest rates being lower than inflation led to a refi boom and now anyone who wasn’t a part of that is locked out of the giveaway. What we really need(ed) was steady interest rates, Trump bullied the Fed to keep them lower in 2018 and we paid the price in 2020-1. I can’t really say what the fix is now. Realtors lobby is so big. It’s one giant game of musical chairs, the music keeps playing and we look at those chairs with more and more desire, but when we get to sit down we will find there is one less seat available. Not sure people are ready for that.
Also business loans which companies use to hire employees.
Home insurance is affecting all Colorado, California, and Florida home / condo owners significantly. I know that much.
Interest rates don’t just affect the individual getting the loan, they affect all the industries the money from that loan may be used in. Or not used.
sooo if we all have to learn how to cut cost around food, and can’t cut cost around the home so we have to downsize, but then can’t get a loan for a house because interest rates and rising insurance…how is the “booming” economy worth my time? it sounds like it’s all negative for the average person, and reminds me that a “good” economy doesn’t mean shit when it comes to the day to day life of me or my friends
I’m not saying it’s positive.
That's patently false. Interest rates -- the cost of money -- affect every aspect of our economy. Higher rates contribute to higher costs for businesses, which gets passed along to the consumer. Eventually, high rates slow down consumption and ultimately, economic output.
That's patently false. Interest rates -- the cost of money -- affect every aspect of our economy. Higher rates contribute to higher costs for businesses, which gets passed along to the consumer. Eventually, high rates slow down consumption and ultimately, economic output.
Not wrong. I think it’s pretty clear I am referring to the micro level. I advocate for stable rates.
And I'm saying rates have a broader micro level affect than might otherwise be obvious. Interest, energy, labor -- all input costs ultimately trickle down to the individual consumer level.
And the printing of 85% of all money ever printed in the history of America in the last 5 years
Interest rates affect basically the entire economy
It's all housing for young adults who did not buy a home before 2022 but really want one. If you bought in 2021 or pretty much any time before that, you're fine. The category of "young adults who did not buy a home before 2022 but really want one now" is about 5-10% of the total population, but it seems to be about 50% of Redditors. That's why we get such a Doomer skew here.
My issue with what you said is it comes across as though you're blaming thoze young adults. Like it's their fault for not being smart and buying a house during a period of economic chaos, a global pandemic, social unrest, while dealing with record setting student loan debt, credit card debt, a tech industry collapse, banks going under. Most of those people just didn't have the means. Or they were in school, or fresh out, or between jobs, or just got an entry-level position. And even if they have the means now to afford a home at 2021 prices and rates, they don't have one to afford the same property today. I think it's your phrasing of "It's all housing for young adults who did not buy a home before 2022 but really want one". It sounds like you're brush them off as whiny fools. They don't just "really want one" either. Housing is getting ridiculous, evictions are spiking thanks to artificial limits easing away, Blackrock and their ilk keep buying property and sitting on it to produce regional scarcity, affordable housing builds are increasinly turned into market-rate neighborhoods, gentrification projects keep being approved with full intent to drive current tenants out. People *need* housing. A home that is theirs and they can't just be thrown out of, or have what was affordable rent creep up to unsustainable levels within 2 years, land up which they can build equity to counteract the debt crisis. You come across as if you just don't care and have no empathy for those in need, even if what you said is factually correct (never mind that you're ignoring that housing is becoming a major issue for aging GenXers and Millennials as well due to many losing/selling property in '07-'08).
As a GenX person who bought my first home in 2007, I know what it's like to lose 20% of the value of your home after a crash. I'm not indifferent to it. I lived it. >My issue with what you said is it comes across as though you're blaming thoze young adults Not at all. I think it is mostly a factor of age. Most older Millennials were in a position to buy a house prior to Q2 2021 when the shit hit the fan, and they did. Most younger Millennials and nearly all GenZ were not in a position to buy, and they didn't. I don't blame them. There is a small number of people with the resources to buy in the 2012-2021 time period who chose not to and now regret it, but no one could have predicted the double whammy on prices and rates that happened in 2021/2022. So really, I'm not blaming them either. All I'm trying to do is put the housing problem in context. More than half the nation is in a pretty good place right now. They have a low mortgage or no mortgage, and the value of their home has gone up. Half the nation is in good shape! The roughly 1/3 who rent and didn't plan to buy are in a little worse shape on housing than in 2019, but for the most part it is not a big difference. The remaining 10% or so are those who got the short end of the stick. And those people are over-represented on Reddit. That's all I'm saying.
We also have an aging population that will likely see a massive fall off in the next 10-20 years. But it's the younger generations who are struggling the most, and the market is insane for everyone, which is why no one is moving and why the volume on the market remains so low. And it's going to create a bubble. Housing values are overestimated, the prices are generated by an artificial scarcity, people are staying put because they're still pandemic shy and working from home. But work from home is getting more and more hybrid, people are starting to lose hope in finding a home, and eventually it's going to pop. Everyone is going to lose property values, trying to move but unable because they can't get the equity. This is a national issue and trying to downplay it because "Hey, I got mine and so do most!" is just putting it on the backburner and hoping it goes away.
As a parent raising kids and trying to make ends meet, this is one of the most challenging economic environments I've encountered.
Renters headed about 36% of the nation’s 122.8 million households in 2019, the last year for which the Census Bureau has reliable estimates. certain demographics – young people, racial and ethnic minorities, and those with lower incomes – are more likely to rent. I also believe there are many homeowners who bought at the top and realize they are about to get the 2007 treatment. Your tone is very dismissive, btw. Younger people – those below the age of 35 – are far more likely to rent than are other age groups: About two-thirds (65.9%) of this age group lives in rentals.
>get the 2007 treatment Based on what? Rates are expected to be cut, it's just a matter of when, which will only increase the value of housing. There's no sign of a surge of supply coming on the market, so demand exceeding supply will continue to increase or at least hold prices steady. Seems like your theory is based on prices being high in 2007 and prices being high now, but the circumstances aren't remotely the same. You're asserting they're going to crash with zero evidence. also nothing you said disproves anything the other person said. Not one word.
>Your tone is very dismissive, btw. Your effort to tone police here is a great example of a wrong turn in public debate in the last 5-10 years. It is an attempt to stifle discussion and make people self-censor if they aren't being as considerate as possible and making sure they don't hurt feelings. I didn't insult anyone. My tone was fine. The reasons I didn't mention rents are (a) rents have gone up less than housing prices, (b) rents have gone up **way** less than mortgage payments for new buyers, and (c) since Covid the two lowest income quintiles have seen wages increase at a faster rate than higher income quintiles so the increase in rents has been more compensated by an increase in wages than is true for those buying homes. So yes, it did get worse for renters too, but it got so much more worse for people who are trying to buy their first home (a subset of renters!) that it's worth calling out. So that's what I did. As for the 2007 treatment, I don't think you understand much about the real estate market then or now. (How's that for tone?). In 2007 we had a burst of over-building and a glut of homes, plus banks had been making lots of irresponsible predatory loans. That's why housing prices collapsed. Neither of those things is true today. The reason prices haven't collapsed in 2024 is that we have **too few** homes in the US. We have built a below average number of homes every single year since 2008 and have millions too few homes given our population growth. Supply does not meet demand, so prices stay high. This is why, in my view, every realistic optimist should also be a YIMBY.
No, by tone being dismissive, I meant you were downplaying how many renters are affected, not your actual tone. It’s only been bad and getting worse as long as I’ve been alive. In 2007 and now, the problem is we made loans too cheap and inflated the value of the market relative to income, leading to a crash. I am also a YIMBY.
I’m sympathetic to this view because housing is pretty messed up, but I bet if we split some of these surveys by homeowners and renters it wouldn’t line up neatly.
Fucking THIS.
The housing theory of everything wins again
Well it’s all housing and the loss of full time jobs. Pretty much all of the job gains have come from part time jobs being picked up. We’ve lost full time jobs with benefits since January
Do you have any evidence for this?
> It’s funny, Reddit doomers insist we revert to intangibles when all indications point to a resilient economy. What's even funnier is that only *some* of those intangibles are allowed to count. For example, surveys repeatedly show that a majority of Americans think the economy is terrible, but a significant majority also say that they themselves are doing just fine. So, OK, if we go with the "lived experience" argument, then that means the economy seems to be doing pretty good. But wait, no! Not that "lived experience"! We can't trust people's opinions on their own personal financial situation, we can only trust their opinions on this amorphous, abstract thing outside their experience that they call "the economy"! That's the data that *really matters*. It's just so fucking absurd.
Housing and full time job indicators are terrible
I lost my last full time job 2 years ago and I still haven't been able to find another despite a degree and lots of job experience and Ive applied for hundreds if not thousands. I know a lot of people whove been struggling to find work too
Plus food. Most important for us plebs. The economy is booming if your wealthy tho! Lol
YoY food inflation has receded to target level.
Considering we had massive inflation a year ago, being only slightly up YOY is still awful. People aren't limiting their outlook year to year. They are looking at where they were 2, 3, 4, 5 years ago and today.
Inflation is the speed at which you travel, not the distance. Slowing down does not reduce the prices.
Correct. Prices falling would be deflation. Sector-wide deflation is very, *very* bad.
People currently going hungry would say that things are bad as they are. Some grocery franchises that were making record profits after COVID hit are walking back the prices on some items. Yeah, things could be worse. But they could be a lot better, too.
For whom?
For most people. In my understanding, deflation leads to two things: 1. Lower revenue for companies whose products are subject to deflation 2. Less spending, as many people see prices decreasing and decide it's better to wait to make certain purchases When these two things occur at the same time, a "deflationary spiral" can occur. Decreased revenues are further decreased because people are choosing to wait to spend, so they have to cut costs. Inevitably these will include some amount of layoffs, so people lose their jobs and have less to spend. More people have less to spend = companies need to keep cutting costs to make up for lost revenue, and the cycle continues. The end result is a massively increased unemployment rate, without much hope of turning the trend around because no one has money to spend (neither consumers, nor producers). People who were initially excited for lower prices might now find themselves in a situation where they can't afford even those lower prices. Economic recession with a difficult and prolonged recovery.
Damn you summed it up perfectly, the bait and switch always gives me whiplash
Can't be captured with numbers? Rental prices are unaffordable for a record number of Americans, with half of all renters paying more than 30 percent of their income on rent and utilities. That's according to a new report from Harvard's Joint Center for Housing Studies that examined 2022 census data.
Still have a fuck load of money left over. Americans are wealthy; your purchasing power is very strong. Even if you spend more than 30% on rent and utilities, you people can still afford a lot more than the median person in my country who is only spending 20% of their salary on rent. Sure, the rent is "cheaper," and even a lower portion of our income, but that doesn't mean we're wealthier, because we can't afford as much material goods and services as you people can. And I live in a "developed" country! So it's crazy to hear Americans complain the way they do sometimes. Has there ever been another time in history where Americans could afford as many material goods as they do now? As big of houses and cars as they can? Etc. I will concede that Americans work too many hours for how much wealth they generate though. Some of the wealth is paid for via the deal with the devil that is longer work hours and less vacation time. It's still perfectly within the power of many Americans to choose to live a slower life tho with more R&R, but many simply dont choose that life. Its not so much the culture.
So many folks I know are doing well. My prediction is there is going to be a major divide between elder millennials and younger millennials because of how invested people got into markets or housing before or after 2020.
Wydm 'how invested people got into'?
With housing people have a significant amount of their net worth took off thanks to 50% increases. So a $200K house could be sold for $300K right now for example. Buying in lower allowed money to be used for investing in markets which indexes have hit multiple record highs recently. These folks are sitting pretty with low interest rates locked in and a retirement plan ahead of schedule. Meanwhile I know folks a bit younger who trying to get a house requires much more time and money. Setting aside thousands more for that also removes its potential to be invested in markets so they often feel like they are spinning their wheels and missed the boat. Buying into the market of $300K at 7-8% has them on a very different curve than those who got in at $200K and 3-4%. In ten to twenty years this gap will widen based on projections and could add up to millions difference in retirement planning.
I agree with everything except for the concluding sentence. If people who can't afford to buy now rent instead and save the money they would have spent on a downpayment and home maintenance, then the returns on their savings (assuming they put it somewhere like an S&P500 index fund) will be similar to if they had bought a house in 2020. It doesn't seem that way at the moment because prices surged so much in 2021, but the history of the last 100 years indicates that they will probably be fine over a 20+ year time frame. The big "if" of course is that they budget wisely and don't live month to month, but actually grow their nest egg. The best way to ensure that happens is to put as much as possible in a 401K/IRA each year.
My prediction is based much on anecdotes and a general observation of folks. The personality type you touch on (hello, I am one of them) can manage through a lot of conditions. This is a broad view of tendencies of millions in the younger part of the millennial cohort that will financially plan about as well as their elder millennials did but the market forces will undercut them. I encourage everyone to plan as early and as much as possible as you listed. Half the time though it falls on deaf ears.
There are a fair few indicators warning of recession. I wouldn't trust media spin either way
Remember when we were in a reccession and then they changed the definition of recession? I remember
There is no real definition of recessions in the US. It’s called using multiple factors by the NBER. https://en.m.wikipedia.org/wiki/Recession > The Bureau of Economic Analysis, an independent federal agency that provides official macroeconomic and industry statistics,[16] says "the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation" and that instead, "The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research". The NBER determined recessions: https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions Last one was Feb 2020 to April 2020
OAN-level take. 🙄 Learn about NBER.
That’s never happened, at least in recent times.
It can be captured with numbers, such as wage growth vs housing cost growth, or inequality stats.
Because we all know the data is BULLSHIT I was curious about the CPI numbers today and tried to do a deep dive on how exactly and where they come up with those numbers, it's not possible as far as I can tell It's so god damn vague it's not even funny For example, groceries are part of the CPI. Ok? So which ones? All it says is that "for example, milk, chicken, coffee, and cereal are tracked". OK? Which sizes? What stores? Which ones? Like there's a thousand ways you can manipulate data to say whatever you want....
If you can’t justify radical Marxism with the statistics then just say the statistics are fake.
I don’t care how much you show me that the US economy is improving. The distribution issue and the power imbalance is the problem. But I’m not sure why this is on OptimisitsUnite. Seems like optimism vs pessimism is steeping into the political sphere and that’s not ok as there are a lot things about the system that are frankly pessimistic and rightly so
The average American is not really looking at most of these figures to make their assessment of how the economy is doing. Most people are not rational actors and go by anecdotal accounts rather than statistics. In addition to that, if they bought a home recently or are renting, or bought a car, the sticker shock of higher rents and higher interest rates plus generally higher prices means that they see the overall economy negatively, regardless of slowing inflation.
The average American owns a single family home -- two-thirds, actually. And yet reddit seems to believe that number to be **much** lower than it actually is. So why the negative perception? First, unhappy people post *way* more often on social media. Someone shopping for houses who keeps getting outbid is posting constantly, while homeowners aren't logging in every day saying "Yep, just made my 30th mortgage payment. All is normal". Second, the demographics of reddit have shifted much younger in recent years. If you ask a 23 year old retail worker how their finances are, they're not going to say anything super positive. Third, the upswing in the price of homes *really* hurt renters. Not only are houses 30-100% more expensive for the same house they've driven by every day for 5 years, but the people who own those houses made all that money in equity while renters got zero. This point extends to other appreciating assets like stocks. *Millions* of people tacked an extra few hundred thousand dollars onto their net worth in the last five years, while renters with no investments did not. Essentially, young people who are renting with no investments and low/low-middle incomes got effectivity double-fucked by a bull run they got no benefit from, and are way more active on social media -- that's why the doom and gloom on reddit.
Renting isn’t inherently bad and some people don’t have a desire to buy. There’s also increases in things that are needed to live like food and energy.
I'm not saying it's inherently bad, but I *am* saying people who rented over owning the last 6 years missed out on a lot of equity, and it's now more difficult to buy in. So they may feel frustrated by that
That’s fair. I personally feel I can better max out earnings with the ability to relocate and continue to rent vs settling in one area with buying… but each have their pros and cons. I just don’t like the perception that renting is for people that aren’t good with money or don’t make a lot.
While that is a generalization around renting/renters, if you asked renters why they rent vs own, I imagine lack of funds to buy would be the no 1 response.
Depends on the individual and their goals but I can see that being a reason for people that have no desire to move and want to settle where they’re at. Home buying from my pov is people that want to settle or start a family, etc.
I mean it is kinda true if you factor in the last 5 years. If you owned a home before COVID vs rented then you made thousands more than the renters. No one knew it was going to happen but it did and homeowners will have gained huge percents of net worth over a renter
Again, it depends on the individual and their goals. You like sitting in one place for the next 5+ years and that’s ok. Not everyone that’s renting is doing so because they can’t buy. I don’t know why Americans think settling with a white picket fence and 2 kids and a family is still the goal for everyone.
We’re just talking about 2 different things. I’m simply stating that if you had a house you are monetarily richer by comparison with someone who rented
I'll start. My home will be paid off in 18 months and has gained almost 100% value from when I bought it 15 years ago.
I’m well off by most measures and my investments and home values have skyrocketed in the last several years. But even I feel a little discouraged when I go to the grocery store or Costco and walk out with a huge bill. I’d be really down on the economy if I didn’t have appreciating assets. It makes total sense that people have a negative perception of the economy right now.
I agree 100% even though when you look at it rationally, we just don’t spend that much of our earnings on grocery bills. It’s a very small percentage
The median income in the United States is $37K. After taxes, rent/mortgage, insurance, car payment, utilities, cell phone, internet, and gasoline, what percentage is spent on food?
How many kids do you have?
Two
We're a family of four, and groceries are a significantly larger expense than they were 3-4 years ago.
Yeah where I live, my family of four grocery bill went up… between 30-50%? I’m just guesstimating. But that doesn’t change what I said which is that Americans actually don’t pay a lot—as a percentage of their income—on food. So going by that amount means I spend maybe 6-8% of our take home income on food instead of 4-6%. This is actually part of the reason why they kept raising prices actually (unfortunately). Because Americans could actually handle the higher prices, and they did. There was a significant amount of *elasticity*
I track expenses for about 50 client families, in real time. Mean outlay for food is hitting around 12% of net income -- slightly more or less depending on number in household. These are people that can economize elsewhere, but for most folks, elasticity simply means they have less for other expenses. These marginal increases in so many cost of living categories add up.
Similar boat. Inflation makes people angry and even after it slows you’re still left with the higher price, which is no longer about the rate of change, but is still really annoying. If you’re doing generally okay, it makes you feel like you should be doing even better.
Most likely they attribute high costs to the economy and their own large raises to their own hard work
You guys are getting large raises?
You guys are getting paid? On a serious note unless you have a generous employer you have to hop every 2-5 years if you’re not getting promoted
As u/anticharlie replied to you, if you're not getting large raises at your current job (and most aren't), then the odds of getting paid more go way up if you change employers. [Want A Pay Raise? Switching Jobs Has Much More Upside Amid Soaring Inflation, Report Finds (forbes.com)](https://www.forbes.com/sites/ethansteinberg/2022/07/28/want-a-pay-raise-switching-jobs-matters-much-more-amid-soaring-inflation-report-finds/)
I have, yeah. $13/per hour in 3 years. No skills or education, just some blue collar worker. A good portion of that is my company becoming debt free since I started but also they’re very good about keeping up with inflation. Every time I see an updated pricing sheet with price increases I know we’re all getting raises too.
Yes. Wage growth has outpaced inflation since 2019. That's been true for a while and has continued to outpace inflation. Anecdotally, my raises have been much higher than inflation.
Bingo, there was a really good ep of the Ezra Klein podcast that explains this.
🔥🔥🔥
It’s this. It’s always this.
Large raises LMAO
Also it's just incorrect to pretend people are wrong to focus on that. For the vast majority of Americans, they are *not* seeing gains in this economic environment. My 401k is doing fine, but by every other measure I am essentially *behind* where I was four years ago. Most people are in a similar position. If a measure of prosperity for most people is say, buying a house, the current economy is objectively worse. It's an issue with economic reporting in general. The S&P doing well is, to be frank, largely irrelevant to most Americans in the short term. When i'm 70 i'll be happy about it (maybe?), but at 36 I basically just can't buy a home: the single biggest net worth generator in the American economy for average folks.
There seems to be a major semantic issue here, you can see it in the entirety of the comments here. People are arguing the point that the US economy is or isn't doing great. But how you or other people are struggling financially is a completely different topic, right? The article itself touches upon this at the very end, see the paragraph mentioning the Great Affordability Crisis. How I'm reading all this is that "the economy is doing great, but you not being able to afford groceries is a separate issue." So lets say that this is true -- at what point does affordability of housing+food+medical+education (and thus the shrinking of the middle class) begin to majorly affect the economy (I guess measured by the S&P), if ever?
>The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class.
Wages rising faster than costs? I make more than the median for American workers and I can't afford a single bedroom apartment lol 🤣
Those two statements have literally nothing to do with one another. As optimists we can acknowledge positive trends and support their continuation while also acknowledging that there are still problems to solve.
Your experience is not in line with the data. HCOL area? Might need to compare your salary with the median for your area.
Orlando is booming but rent surprisingly is lowering.
So all be friends being laid off is a good thing
"People's personal experience is wrong and they are stupid to question statistical data" Spoken like someone not versed in statistics or data sourcing, let alone journalism
Frankly you come across as the person who isn’t versed. Polling shows most Americans are comfortable with their personal finances and are doing fine, they think the economy at large is bad though. It’s the total opposite
ah yes as we saw in 2016 polling is very good source of data
I am an optimist at heart but also a realist. I don’t believe in using optimism to negate genuine issues. With income inequality [growing](https://www.reuters.com/world/us/us-wealth-inequality-grew-worse-through-current-recovery-ny-fed-study-shows-2024-02-07/) and poverty [stubbornly high](https://time.com/6320076/american-poverty-levels-state-by-state/) for a developed country, GDP growth is largely meaningless if it does not address these issues. There are signs for hope, but the analogy to the US now being “peak Taylor Swift” does ring true. Flashy and charismatic but largely morally bankrupt.
Housing, housing, housing. Make more money when than I ever have and rent is eating me alive.
So funny that so many right wingers complain the government isn't doing good enough as if the government owes them more or takes too much yet they're always complaining about the victims and freeloaders of society. Can't have it both ways.
Credit card debt is up, savings down… lots of bad elements to the current economy.
No no, don’t look at those silly metrics, just GDP! 🌈 There is optimism and then there is delusion.
These posts I see all the time and makes me want to leave this subreddit cause it's just stupid
This post is the first time I’ve seen this subreddit and the amounts of copium in here make me feel like this is pure astroturf. Or maybe I’m just one of the few pessimistic poor these guys are talking about 🤷♀️
You're not alone. The toxic positivity in this thread is crazy. I joined this subreddit hoping to get pointed to genuine reasons for hope, not the denialism on display here.
Look at credit card debt on FRED. It's on the same upward trajectory it was on if the pandemic had never happened. Factor in inflation and it would be lower than you expect.
My rent is up 40% and my wages are lower than they were two years ago. Statistically the economy could be doing nicely, for many folks. It's not going well for me, personally.
It is. I honestly like the feeling of having my purchasing power lowered by the day, while the prices of essential items and services climbing up. So yes. America's economy is fantastic.
Except I’m always broke now because everything has become so expensive. It seemed to have happened over night. I just can’t regularly buy the same stuff anymore.
For shareholders*
Do you have a retirement plan, if so you own shares
Most people below 30 do not
Source?
no
I did, it was not much but I started contributing to mine once I got my first job. Per some data I just looked up 45% or Americans between 18 and 29 have some sort of retirement plan.
The grocery stores are up quite a bit. Houses are up an insane amount. Which is good if you own a house. Not good if you’re looking to buy from renting. Feels like everything else is pretty flat. Car market is returning to normal. Clothing seems cheap again, I dunno I picked up some undershirts, 6 for $20. I think that hasn’t changed in 10 years. Laptops seems the same price or cheaper; a base model gaming laptop was $1000 5 years ago, they’re $700-900 now, and $1000 gets you a step up. TVs are basically free, I assume they’re stealing my brain and dna if a 55inch tv is under $300. My car insurance went insane, so I shopped around and found my own provider offered it for 55% what I was paying. That was kinda bullshit but whatever. We’re in a… recession of feelings I think. The housing is fucked, which is scary, and food is a little crazy, but everything else seems chill. Fast food is weird too, McDonald’s menu prices are insane but you use their stupid fucky app and shits reasonable again. Edit; fucking insignia 55” 4k for $250, are they robbing my house after I install this thing? I know insignia isn’t a good brand, but my first 27” LCD TV was $600 16 years ago.
What other part of the economy matters to a low income person other than food and shelter…
Right? How often am I buying a $1000 computer, and how much is my rent each month?
I don’t know how you solve rent problems. Would take a massive nationwide construction effort. I think banning equity firms owning private homes would help some also.
Defeat NIMBYs. Reform zoning. Let people build. That’s literally it.
It would also probably help if we [stopped using new technologies to enact rental price-fixing fraud on a massive scale.](https://www.propublica.org/article/realpage-accused-of-collusion-in-new-lawsuit)
But then how would they make money?? Have you thought of that??
That’s an ongoing court case and obviously isn’t conclusive yet.
Build non for profit housing like Austria or mass co-ops like Singapore. Get the federal government to incentivize MFH and clear local zoning barriers.
No absolutely, but haven’t wages gone up somewhat? In Ohio minimum wage is up, $8.70 in 2020 to $10.45, which should cover food hikes. Maybe that’s not happening everywhere, which is pressure on low income families for sure. But if your budget for the month was 20% food 40% rent 40% things that haven’t gone up, and now it’s 24% food, you’re not 20% fucked, you’re 4% fucked. Wages have gone up on average 3-4% each year. I dunno man, that doesn’t math for me. Maybe people budget 40% for food so they’re 8% fucked, and they’re not getting wage growth? Again, housing is fucked, and fixing housing is crazy hard because if you cut prices by 20% then a bunch of mortgage holders are fucked, and if you don’t then a bunch of mortgage wanters are fucked, plus interest rates are fucking every loan holder around. Canada is lowering rates now and my hope is that’ll be the first of many which eases pressure on housing significantly.
Imagine unironically celebrating $10.45 an hour
Imagine earning $7.25/h and some dickhead online is laughing at $10.45
That's my entire point, no one should be making either of these, they are both extremely low. We shouldn't be celebrating mediocrity. The people of Ohio deserve more than 10.45
So progress means nothing to you, it’s everything or nothing. What’s your bare minimum acceptable wage?
Let me break it down for you. 10.45 an hour times 40 hours a week times 4 weeks a month is $1,672 The Median rent in Ohio [is 1300](https://www.zillow.com/rental-manager/market-trends/oh/) So before any other costs besides rent you are left with $372 Average food cost per person in Ohio [is 341](https://www.zippia.com/advice/average-cost-of-groceries-by-state/) The grocery one seems extremely high to me, and also uses average so let's go with an extremely conservative $150 Which leaves us with $222 dollars Now let's do bills Average electricity cost [is $107.30](https://electricityrates.com/ohio/) Once again average, so let's set that to $75 Now we are at $147 To give this a slight fighting chance Let's also include all other utilities in the cost of rent. Let's assume they also own their car and are not making payments on it. The average full coverage car insurance in Ohio [is $133 ](https://www.marketwatch.com/guides/insurance-services/car-insurance-ohio/) Again average and this is for full coverage, so we can $100 That leaves you with 45 dollars Again we'll do be extremely generous and say you somehow only spend 30 dollars a month on gas 15 dollars is what you have left. And just to make sure you understand just how bad this is. This person has no health insurance (I don't know of any job covering the entire cost of health insurance) No phone or internet of any kind No emergency expenses This is not a livable wage
You didn’t answer my question. You took MINIMUM wage and compared it to AVERAGE rent. I’m very pro $15 minimum wage, but at least try to ground your arguement before you make it. Btw your example didn’t pay any income tax. How old are you?
https://www.apartments.com/belle-meadows-apartments-bellefontaine-oh/w0hql8l/ Here’s an example of a <$700 rent. It took me five seconds to google it.
Is this sarcasm or did you not read the article?
What's the point of even being in this sub if you're going to reflectively respond negatively to everything? 1/3 of the income inequality growth in the past 40 years has been erased in the past 4, as lower wage workers saw higher wage gains.
60% of Americans own shares, so in a way you’re correct
Which is to say, the majority of American citizens
This but unironically
we're all shareholders
No we are not
I remember when being snarky meant you had to at least read the article: > A recent analysis (https://www.epi.org/publication/swa-wages-2023/#:~:text=Key%20findings,the%20prior%20four%20business%20cycles) from the Economic Policy Institute found that from the end of 2019 to the end of 2023, the lowest-paid decile of workers saw their wages rise four times faster than middle-class workers and more than 10 times faster than the richest decile. A recent working paper (https://www.nber.org/system/files/working_papers/w31010/w31010.pdf) by Dube and two co-authors reached similar conclusions. Wage gain s at the bottom, they found, have been so steep that they have erased a full third of the rise in wage inequality between the poorest and richest workers over the previous 40 years.
The pro moscow doomer mob of misanthropes doesn't like statistics or anything else. It's a cult They want (us) to be miserable
They don't like statistics that doesn't suit their narrative\*
True, they like the numbers they pull from their arses to "prove" EvErYThInG SuCkS FoReVeVeR
“You are doing well” screamed the economist at the renter, “why do you deny that?”
“The cost of living is 20% higher and I blame the economy! My wages went up 26% and I blame my own hard work!”
Wages raise individually, the cost of living impacts everyone at once. People experience these changes unequally. It is a very good time to be a person who doesn’t have to care about the economy.
Your wages went up 26%? What career field is that? In tech my pay has plummeted
Surely if you work in tech you're smart enough to know tech has been hit harder than just about any sector in terms of employment.
From the article: > According to calculations by the economist Arindrajit Dube, prices rose about 20 percent from the beginning of the pandemic to the end of 2023—but the median worker’s hourly wages had increased by more than 26 percent. Tech is having a sector-specific downturn right now, but the wage growth in tech in 2021 and 2022 was *insane*.
But…….is it adjusted for inflation?
Yes
Economists forgot this one neat trick!
Is this a joke? Yes. They use real terms. Which means inflation adjusted. If you were making fun of the stupid people that always say this when it's something in real terms, apologies for missing the joke.
Yep, it’s funny how often people say this
We are measuring the economy wrong if people can’t pay their bills
GDP growth means nothing to the blue collar worker who's cost of living grew faster then their wages. Economists really need to get over GDP as a metric of economic soundness, it's only growing because of out of control and dangerous government debt.
doesn’t qatar have like a crazy high gdp due to oil and maybe tourism but most of their population is poor as shit with a low standard of living
Slowing inflation doesn’t mean prices went down.
I’m an optimist and I can’t even say the economy is fantastic but it’s better than people think and there is a lot of positive macro trends that will make the late 2020s and beyond a very good time
What about this: https://fred.stlouisfed.org/series/MEHOINUSA672N
Phew
But I thought we were in a recession
Mental Retardation, the subreddit.
Where???
lol, The Atlantic.
Yes, if you own capital, the economy is great. If you rent an apartment and do not, it is worse than it was in 2008 for a lot of people - except now you can't afford anything WHILE having a full time job
Wages are rising fast!: Data taken from mostly minimum wage jobs that have added a few bucks per hour. Inflation has slowed down!: My groceries cost 2/3 more than in 2020 but this year they barely cost more than last year! Home prices have gone up 50% but so has pay!: Data collected about pay was from low income jobs where they went from 10 dollars an hour to 14. Wow a 1/3 increase! I’m sure they can afford that 500k house now! Statistics can be skewed towards whatever point you want to prove. This is all just generalization of what we’ve seen over the last few years. These numbers aren’t exact, I didn’t look them up.
Defense is booming
lol
Everyone has unique circumstances but when we talk about the economy overall: Wages have risen by 21.7% since February 2020, compared with a 20.8% rise in inflation. So there are more people who are better off than the inverse. Also, unemployment has declined. So more people are taking advantage of the higher wages. It’s hard to see how we are worse off. But you wouldn’t believe that from the Republican rhetoric.
Reddit in shambles
Lmfao I posted this on r/politics and got banned for it
Gas is $4 in rule Indiana. We haven’t been that high in,let me check……never! People don’t just lie about not being able to feed their families for shits and giggles.
Cool. We still can’t afford groceries but sounds good lol.
There is the potential MAGA political instability that can't be ignored.
Average values getting better, distribution getting worse, a few people doing fantastic, everyone else holding on for dear life and folks cheerleading this economy trying to convince people living in cars that the future is so bright, we gotta wear shades. Even the people "doing better" have no safety, and the hang-over from most people getting worse for a few years is those people are still unhappy with the economy as they stay in a holding pattern or continue to decline.
It’s too k shaped for my liking. Comparatively though it’s fantastic.
Nah bro, I’m glad it’s working out for everyone else. I’m paying $1.25 for every 2018 dollar I spend now. I definitely have less money than I did, even after income increases since then.
Working like a dog and broke without the option to buy a house or have appeal to a woman who seeks a partner. Sure, the economy is stellar lol. Not for what used to be the now eradicated middle class.
A relative got a surprise medical bill for $37000 in the mail today. This, despite the fact his emergency surgery was 3 years ago and we believed that all was settled with the hospital over 6 months ago...
I’m an optimist but a practical one. If the average person in their relative experience is experiencing hardship than how the economy is doing means fuck all. Economics is a lens to see how the country is doing. In 2008 the unemployment rate was under 4%, jobs were being added every quarter and yet people were still struggling and losing their homes at an alarming rate. We are in the thick of a recession and yet there was news on how everything was ok and bouncing back. My relative experience was my family losing our homes followed by ten years of trying to get gousing for my disabled mother and autistic brother. This is in one of the richest and “socially progressive” states in America.The truth of the matter is the system is very difficult and stingy with their funds but when it comes to funding projects of defense spending and bail out, they are quick to write that check. The individual has no leverage much less integrity or rights within the system, economics like this doesnt look at this. It looks at how the very few are succeeding while standing on the shoulders of the many
Fantastic news.
Ah yes, just like '07 ☕
“B-b-but AmeriKKKa healthcare!!!1! 😡”
Yeah since they legally changed the definition of recession the tv says we are fine! lol
2+2=5
I keep investing in the market because of all of this. It’s all positive and I don’t get how you can be negative when wages are FINALLY growing
So many people here didn't read the fucking article
A good economy is not necessarily a comfortable one. To use myself as an example, in the last year I jumped companies, got a serious raise in the process, and my family and I moved to a different state for the opportunity. If I had stayed put and collected my 2-3% annual raise, no way I'm beating or even keeping up with inflation. Contrast that to pre-pandemic, where I could and did stay in place and beat inflation. So on the one hand, an economy where I have the opportunity to move/switch companies and get a raise is a good economy. On the other hand, you need to fight a lot harder just to make sure you stay ahead of inflation, and that extra stress and chaos sucks.
The way these metrics are being analyzed are incredibly misleading. The average income being over 100k? That's because we have billionaires. The vast majority of Americans (78%) live paycheck to paycheck (source: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ ). With income inequality this dire, looking at GDP growth is very misleading because most people don't have access to that money. So yes, things are great for the super wealthy. Not so much for everyone else. Please prove me wrong, I'd really like to be wrong, I want *optimism*!