Survey Says U.S. Economy Is in Really Bad Shape
The U.S. economy is in really bad shape.
Don’t just look at the data on the surface; dig a little deeper and you will see how conditions are worsening.
Politicians and mainstream economists will tell you there isn’t anything wrong. To prove their point, they will note that the unemployment rate is a historic low, or that the pace of growth in the U.S. is on par with the historical average.
Don’t get lured by this false optimism. Here’s the thing: the above points doesn’t really say much about how the average American citizen is doing.
Before going into any details, know that the U.S. economy is highly dependent on average Americans. They are the ones who have been behind every case of economic growth in the country. If the average Joe is suffering, the economy doesn’t go anywhere.
And right now, the struggle for Americans is very severe.
According to the 2019 Modern Wealth Survey taken by the Charles Schwab Corporation (NYSE:SCHW), 59% of Americans live paycheck to paycheck. (Source: “2019 Modern Wealth Survey,” Charles Schwab Corporation, last accessed May 21, 2019.)
But that’s not all. The survey also found that only 38% of Americans have built an emergency fund, only 32% don’t carry credit card debt and make payments on time, and when it comes to paying bills and savings, just 50% of Americans pay their bills and save.
And the 2019 Modern Wealth Survey is just one of many that say the average American is struggling. For instance, one survey coming out of the University of Chicago found that 51% of working Americans said that missing more than one paycheck would mean that they may not be able to pay for necessities without turning to their personal savings. What’s more, 31% of households said they would need to skip the purchase of essentials if they missed two paychecks. (Source: “Most Working Americans Would Face Economic Hardship If They Missed More than One Paycheck,” NORC At The University of Chicago, May 16, 2019.)
What Happens if There’s an Economic Slowdown?
I could go on and list several more surveys, studies, and statistics that suggest that the average American is struggling. But I won’t; in past articles, I have discussed the struggling of average Americans quite a lot.
Consider this: if Americans are struggling when unemployment is at a record low and the U.S. economy is growing at a decent pace, what will happen in the case of a slowdown?
And what if there are major job losses? We are seeing a wave of job cuts already. For example, Ford Motor Company (NYSE:F) recently announced that it will cut its labor force by 7,000 by August 2019. (Source: “Ford to cut 7,000 jobs by August, including 900 this week,” CNBC, May 20, 2019.)
What will happen if more companies follow suit?
The longer the struggle for the average American, the longer they will put a halt to their spending.