This report was originally published by Tyler Durden at Zero Hedge
The latest confirmation that the US consumer is now effectively tapped out came moments ago when the Dept of Commerce reported that in November, Personal Income rose by a lower than expected 0.3% (exp. 0.4%), while US consumers continued to splurge at an accelerated rate, with personal spending rising 0.6%, above the 0.5% expected, as Americans decided to splurge on holiday products and services.
A way of visualizing the historical change in income, spending – and savings – is the next chart below:
However, and speaking of savings, therein lay the rub, because as Americans splurged in November – and much of 2017 – the personal savings rate continued to decline, and in the latest month it tumbled from 3.2% to 2.9%, the lowest since November 2007, which as a reminder is one month before the recession started.
This incidentally explains the surge in credit card usages we noted last night. As a reminder, the 13-week annualized credit card balances in the U.S. have gone completely vertical in the last few months of 2017, a troubling sign and yet another confirmation that US household savings are almost gone, forcing Americans to resort to savings.
What is somewhat strange is that this collapse in savings took place even as US wage growth actually surprised to the upside, with wage growth rising at 4.5% Y/Y (private rose 4.8%, government 3.0%), more than core consumer spending (4.3%) for the first time since December 2015.
And yet, despite this favorable wage background, Americans were not only unable to save but saw collective savings decline by $41 billion in November to $426 billion.
At this rate the Fed will have to step in and bailout the plunge in bitcoin or else risk a complete collapse in holiday spending.
Sort of like all in at the casino and walking out broke and shattered.
And like a casino – the house will always win the majority of the time. The only winner is the owner of the tables.
How would they know how much I have in savings, I DON’T KEEP IT IN THE BANK! Why anyone would keep $ in the bank subjected to every type of confiscation imaginable is beyond me….
they calculate savings rate based on income vs spending. It’s a rough estimate of course.
Traditionally, people began using Banks for 2 reasons: #1 To protect the money from being stolen and #2 because banks promised to pay interest to depositors for allowing them to hold and lend their money.
Now your deposits are no longer secure ( an almost 50x ratio of deposits vs FDIC fund) and Congress passed the authority to confiscate personal accounts in the event of the next banking “crisis”–a “bail in” if you will.
Secondly, there is really no interest gained from bank savings accounts– a $10k deposit in a straight savings account will net you about $15 in interest per annum.
Banks are a fraud and letting them hold any money above your bill paying only furthers the fractional currency/lending scam.
And I bet that all of those people have credit ratings over 700. Just the way the system likes it. I have decent income, no debt, and pretty good savings account. My credit score is under 700 and the system hates me. They even try to over charge me on my car insurance based on my credit score. Try to rent an apartment. They have phone apps that show your credit score when you call them. They won’t look at your credit report. Too lazy. They just won’t return your call because of the credit score. It ain’t your Grandad’s America any more.
That is exactly right.
My wife and I make a good living. Seems like we would get a “pre-approved” credit card offer at least once a week. Some with limits as high as $50k. We made the decision to stop using credit. We pay our bills with a check and use cash or debit card. Guess what… we stopped getting the offers and our credit rating started sliding down over time. (As a side benefit, we also found that we tended to watch our spending closer).
Whether it is intentional or not you are punished for getting off the treadmill. Get off anyway. You will be richer for it.
They’re getting everyone hooked on credit like its heroin, then they’ll jack up the rates to 25% and make all the gullible debtors slaves forever. I see a lot of suicides and killing sprees as a result of people flipping out once they realize they’ve been had.
CJ, I always hear it said that the system doesn’t like for anyone to be debt-free. In my case they don’t care since I’ve never been allowed to get anything. So be it. Works for me.
I have little debt (3%) and modest income and a little in savings. My credit score is 835, you must of had a bad history years ago, don’t mislead people.
People are tapped out, not all because they bought things they didnt need. Land taxes in my area are up close to 50% over the last 4 yrs. Getting rid of credit cards, canceling cable and buying only used cars has put us in a savings mode but just barely. I just cant understand how people are still making it. Dosent that credit card eventually run out?
I sure hope one day SHTFplan is right and theres a colapse. It would be a whole lot easier to run a homestead without working somewhere else for 50 hrs a week. My guess is it will be a slow painful slide all the way to the end. Strap every american with higher taxes, bills, fees and regulations untill they have nothing left.
Anywho have a Merry Christmas and enjoy the season. I asked for a food saver, anyone have a good MRE recipe for backpacking?
So, how many used cars did you have to buy over the last 4 years?
I hear ya. My property taxes have virtually DOUBLED in the last 5 years. And we don’t get shit for services! In fact I am thinking of getting people in the area to sue the county for non performance of services. The area where our cabin is takes in 600K in taxes and all we get is the road graded maybe 2 times a year period. But the new tax bill will save me more than enough to pay off property taxes.
It seems like Everyone from the government on down spend more than they take in. very few are fiscally responsible. It isn’t long term sustainable. I haven’t a clue when but eventually it will collapse.
Corp America and this cock sucking no good Federal Gov’t are completely complicit with regards to all of this thievery and Greed and manipulation. If you notice, the cost of everything and I do mean everything continuously goes up and up and up and wages are a complete god damn disgraceful joke! Why do you think that is? Because the no good, greedy Corp America has set it up that way and Corp America has the Gov’t clowns in their back pockets. Once again the cunts screw us with not one sad, lonely, kiss on the cheek. . .
Right on.
This Person everyone has now forgotten once said:
“Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions.”
A bunch of charts, graphs and ignorant techno babble just to say we Americans are confident about our economic outlook.
And rightly so, despite eurotrash, muslim and russian hackers and propaganda warmongers who’ve been working overtime, forever, trying to bring us down. LOL joke’s on them!!!
All those that haven’t bought a Christmas gift, raise your hands!!!!!
Just me??? says me laughing with a closet of 100s.
I stopped social manipulation years ago–Jesus’ birthday is celebrated here.
(hand raised). We stopped aknowledging bullshit holidays a few years ago. Christmas, easter, 4th of july, halloween, etc. They are a fraud and the only reason most people celebrate them is to go along with the herd. Most of them are peagan in roots and tied to the ancient peagan solstice/ fertility rituals. Anyone who truly respects truth does not adhere to the bullshit.
Genius, I still get preps even at Christmas time. All year round. Any day is a good day for getting preps.
I get preps when I get good deals or have the $. I don’t need some holiday crap to justify it. I give gifts the same way. Don’t ya just love how people are bullied into spending $ on some complete bullshit holiday just to fit in with the herd? Stupid hive minded insecure fools. Maybe send people a card saying.. “Times are tough, life is hard, here’s your fucking christmas card” lol 😛
Genius, I frequently get certain preps on sale myself so I know the feeling. BTW, forgot to mention I’m back at the BOL for the holidays. I just got an early gift of targets with certain politicians’ and MSM talking heads’ pictures on them. I won’t say who but everyone can guess which ones to their hearts desire. Target practice will be a real blast this time, heehee!
I despise material Christmas. The Missus’ always calls me scrooge when it comes around. She puts up the tree ’cause I won’t. Her family comes over on Christmas for dinner. I hide out in the comfort of my shop. Got to cut up another deer anyway.
BTW, Merry Christmas everyone! Hope you’re warm, got plenty of good vittles, good health, and enjoying your loved ones.
The big spike in spending and debt was Americans affected by the Hurricanes replacing cars and repairing homes.
Insurance covered the old cars that they often still owed money on, but they still had to buy newer cars on credit to make up the difference. The smart ones pulled cash out of the deal because car loans are often cheaper credit than home improvement or credit card money.
Replacing hurricane damaged appliances etc was a loss too, unless they had replacement cost insurance.
I see no surprise in these charts.
Keep stacking preppers. It’s a form of insurance.
Let me add the buying spree is just warming up with the fires in California that are still burning.
California rebuilding is ground up. Many flooded by the hurricanes are already back in their homes. California is going to be a lot slower. Some will be out of their homes for two years.
Who wants to rebuild in the black forest? Most will head for greener pastures aka other states. We need a wall around cali!
My income level is too low to qualify for credit so I don’t use it for anything. My cars come from private owners for cash only. That’s the only kind of people who will sell me a car. I have no debt on anything so I can buy more preps at one time than I could have otherwise. I’m still saving up to get an old truck from the 90s to fix up and it will be for cash only. Most of my transactions are in cash. I piss off cashiers all the time when I pull out cash instead of a card, LOL. There is a definite advantage to being debt-free.
BTW, the only ‘buying spree’ for me is getting preps.
“There is a definite advantage to being debt-free.”
There certainly is BH. I know folks who bought two new vehicles with notes over $100k on 7 year amortizations. Those vehicles have a fair market value of $75k or so today. By all appearances they are prosperous. So…
Who is wealthier – you or them?
Who sleeps better?
Who is more recession proof?
I’ll give you a hint. YOU are.
The sheep are impressed by pillars of society and those living in McMansions that all look about the same. The smart ones that are loaded don’t flaunt their wealth. The wealth flaunters might as well have a target on their back for criminals.
stuart, AMEN to that one. No way I could ever dispute that. The most I ever spent on a vehicle was $4000 and that was back in the late 90s. I can’t see spending $100K on a vehicle but on some prepper property is another story.
” Then you get a hold of some dough and what happens , all those nice sweet lovable people become helots , a lotta heels ” .
Buying Christmas presents with credit cards-DUMBER THAN DUMB.
A dollar under the mattress is much safer than a dollar in the bank.
The dollar under the mattress can’t get hacked. That’s what’s coming my friends.
Averages are just that….AVERAGES.
One size does not fit all.
There are people saving and spending less because our
leaders can’t clear the swamp of all the libtard evil.
Until the swamp is cleared….and NWO kikes are gone….
things will never be NORMAL. Investing in our own demise
is counter productive for Pro-Americans.
Not buying mail order this year, from any multi-billionaire who
in time…could become the power hungry, whip who will then
enslave us or beat us to death.
Remember……those holding the most money rule.
That’s because people don’t care anymore. The world is going to hell in a hand basket so people are going to have fun until a war starts. Who cares about paying our debts, we will spend till the cows come home. Who cares about corporations or governments. I don’t.