(by Michael Snyder | The Economic Collapse Blog) – Economic conditions are much worse than they tell you. Over the past year, prices have risen much faster than most of our incomes. As a result, our standard of living has been rapidly declining. It’s getting harder and harder for American households to make it from month to month, and as you’ll see below, more than a third of all American adults depend on their parents to pay at least some of their bills at this moment. But even more alarming is what has been happening to real disposable income. According to Fox Business, the most recent GDP report revealed that the drop in real disposable income we witnessed in 2022 was the largest measured since 1932…
The most troubling piece of information from the GDP report is the precipitous drop in real disposable income, which fell by more than $1 trillion in 2022. For context, this is the second largest percentage drop in disposable income , behind only 1932, the worst year of the Great Depression.
Just think about it for a moment.
The last time real disposable income declined so rapidly was literally during the peak of the Great Depression.
And as our incomes shrink further and further, more Americans begin to fall behind on their bills.
For example, the share of subprime auto borrowers who are at least 60 days behind on their payments just rose to the highest level we’ve seen since 2008…
In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills rose to 5.67%, a significant increase from a seven-year low of 2.58% in April 2021 , according to Fitch Ratings. It marks the highest rate of Americans struggling to make their car payments since the 2008 financial crisis.
We’re already starting to witness the biggest tsunami of recoveries we’ve seen since the “Great Recession,” and it’s only going to get worse in the coming months.
A San Antonio woman who knows her vehicle could be repossessed at any moment has decided hiding it is the best strategy for now…
For some, however, the only lesson is to try to outsmart the repo man—hardly the best long-term strategy. Take San Antonio native Zhea Zarecor, who is currently trying to negotiate with her lender to keep her 2013 Honda Fit from repossessing. In the meantime, hide it.
The 53-year-old, currently in school for her bachelor’s degree in information technology (and taking out massive student loans for an education she should have had about 35 years ago) splits the monthly car bill , about $178, with her. flatmate. But then the roommate lost his job, and with the rising prices of groceries and everyday items, it wasn’t enough to pay for the car.
Zarecor is trying to earn extra money with odd jobs such as contract secretarial work and participation in medical studies, but often feels hopeless, he said. “Our money doesn’t go as far as it used to,” he said. “I don’t see the prices going down, so the only relief I see is when I get the title.”
Unfortunately, most of the country is barely getting by right now.
As I discussed in a previous article, a recent survey found that 57 percent of Americans can’t even afford to pay a $1,000 emergency expense right now.
And a separate survey found that a whopping 35 percent of all American adults still rely on mom and dad to pay at least some of the bills…
More than a third of adults (35%) admit they still have at least one bill on their parent’s tab. According to a new survey of 2,000 Americans, the top three expenses their parents still pay are rent (19%), groceries (19%) and utilities (16%). In fact, nearly a quarter (24%) of millennials say their parents cover the rent.
Are things really that bad?
Unfortunately, economic conditions will only worsen in the coming months as many more Americans lose their jobs.
On Monday, I was very saddened to learn that electronics giant Philips will be axing 6,000 more workers…
Philips announced on Monday that it will cut another 6,000 jobs worldwide as it works to boost profitability.
The workforce reduction will take place over the next two years with the first 3,000 cuts taking place this year, the Dutch maker of consumer electronics and medical equipment said on Monday. In its earnings report, the company revealed that it suffered a net loss of 1.6 billion euros in 2022, which is down from a net profit of 3.3 billion euros last year.
And it’s also being reported that one of my favorite toy manufacturers has decided to cut roughly “15% of its global full-time workforce.”
I could go on and on if you want.
In fact, every day I could fill my articles with nothing but job loss announcements.
We have entered a very painful economic recession and a leading Wall Street economist is warning that the full impact of this crisis will not be felt until the second half of 2023…
A looming recession this year will look more like the 1970s than a 2008-07 slump, according to one Wall Street economist.
“People are too focused on ’08 and 2020. This is more like 1973, ’74 and 2021,” Piper Sandler chief global economist Nancy Lazar said on “Mornings with Maria” on Monday .
Lazar predicted to feel the full impact of a recession in the second half of 2023 as the lagged effects of Federal Reserve rate hikes take hold.
In fact, it would be quite wonderful if his seemingly gloomy prognosis were accurate.
Because I don’t think we’re heading for a slowdown like the one we experienced in the early 1970s.
Rather, I see all kinds of evidence that we are in the early stages of the economic equivalent of “the big one.”
I think things are going to be very difficult this year, and I think the long-term outlook is even worse.
Our leaders assured us that everything would be fine even as they flooded the system with money and were engaging in the greatest debt in human history.
Now a day of reckoning has come, and we will suffer the consequences of their foolish decisions.