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As we head into 2024, which will undoubtedly be the defining election year in our nation's history, I am reminded of James Carville's famous words from the 1992 presidential campaign: “It's the economy, you idiot.”
The Biden administration continues to tout Bidennomics, despite the fact that a majority of Americans believe they are worse off economically than they were during the Trump administration. Americans also believe that economic prospects will improve under a second Trump administration.
Trending figures on the financial network paint a rosy economic picture for the year ahead. Are they right, or are they just parroting the current administration's talking points?
Biden appears “out of touch'' with mainstream America as he brags about the economy: The Economist
Economic indicators convey mixed messages, but I believe 2024 will be a bumpy road.
An election focused on economic performance could cost President Joe Biden his job. (AP Photo/Evan Vucci)
The consumer price index in November 2023, a leading indicator of inflation, was 3.1%. That's a significant number, but higher than the Fed's 2% goal.
Core inflation, which excludes volatile food and fuel rates (which affect working Americans the most), remains very high at 4%.
However, the story changes when we look at the inflation rate compared to 2021. The inflation rate in November 2022 is 7.1%, which means that prices have increased by more than 10% compared to 2021.
The effects of inflation are destroying the middle class and working Americans.
Credit card debt is at an all-time high of over $1 trillion. Sadly, people aren't taking on debt to buy a 75-inch TV or taking a trip to Paris, they're taking on credit card debt to pay rent, utilities, and groceries. is. And they pay nearly 25% interest for that privilege.
And credit is becoming increasingly difficult to buy for working Americans. “In the 12 months to June, 21.8% of people who applied for credit were denied,” and the situation is only getting worse.
Beyond record credit card debt, record numbers of people are taking out emergency loans. 401K savings plan, Emergency withdrawals will increase by 27% compared to 2022.
Additionally, a growing number of working Americans are relying on “buy now, pay later” programs to finance their expenses.
President Joe Biden has battled bad economic news throughout his term. He might finally catch up to him in 2024. (Oliver Contreras/Bloomberg via Getty Images)
Record debt is starting to affect the economy.
Recent research shows that the American Dream is out of reach for 99% of Americans.
According to the real estate data provider, researchers last year “examined median home prices in approximately 575 U.S. counties and found that 99% of those areas had home prices that were lower than that of a median income earner of $71,214 a year. It turned out to be unaffordable.”
Additionally, for those looking to purchase a home, the home purchase cancellation rate reached 16.3% in September, meaning approximately 53,000 contracts were canceled in the same month.
Car repossessions are also on the rise as people who bought new cars with government coronavirus relief funds find they can't afford a new Porsche.
Finally, what most economists don't see is the fact that student loan repayments became mandatory in October, leaving 22 million people with new debt obligations. According to the U.S. Department of Education, only 60% of borrowers made their first payment “by mid-November.”
This situation is beginning to reflect how working Americans feel about 2024. “The University of Michigan Consumer Confidence Index ended the month at 61.3, down 3.9% from October's 63.8. The Current Situation Index fell 3.3% to 68.3, while the Future Situation Index came in at 68.3. The Expectations Index fell 4.2% to 56.8,” U.S. News & World Report reported.
So what does this mean for America?
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As the 2023 holiday credit card billing deadline approaches, I believe U.S. consumer spending will decline significantly and people will be forced to make difficult choices about how they spend their money.
Oil prices will continue to rise as Houthi rebels disrupt free trade through the Red Sea. Oil prices currently stand at $75 per barrel and could easily reach $80 by the new year.
Economic indicators convey mixed messages, but I believe 2024 will be a bumpy road.
Reduced traffic through the Panama Canal will begin to impact American retailers by mid-first quarter of 2024. You will see rising prices and shortages on shelves.
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2024 will be a big year. The US economy will slow and likely experience a mild recession. Unemployment will rise and consumer spending will fall as working Americans try to pay down their debts.
The main economic driver will come from the presidential election in November. 2024 will undoubtedly be a year focused on the economy, stupid, and Americans will have the final say this November.
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