Bad Times Continue for the American Consumer

Alex Moschina|June 8, 2024

Let’s check in on the American consumer.

In April, according to the most recent data available from the Bureau of Economic Analysis, spending on services like rent, utilities, insurance and medical care went up $49.1 billion from the previous month.

Housing remains scarce, which – combined with sky-high interest rates – makes buying a home both costly and difficult. In 10 years, the median home price in the U.S. has gone from less than $200,000 to more than $400,000.

And while costs of living continue to rise, consumers continue to put more and more of their daily expenses “on plastic” (as we used to say in the ’90s). Our nation’s total outstanding credit card balance now sits at a once-unthinkable $1.12 trillion, up 13% from a year ago.

Despite all those reminders from the powers that be that the economy is actually doing fine, thanks, it’s clear from the cheap seats that all is not well.

The market seems to be wising up as well.

Over the past several weeks, the Fear & Greed Index has been trending steadily back toward Fear…

And the Fed can see that its war against inflation is far from over.

It also realizes investors are clinging desperately to the hope that interest rates will start to come down sooner than later.

What could go wrong?

That’s why our mantra this summer is to keep calm… get some sun… and buy the dips.

There will be lots of them.

And in the meantime, we can play these bizarre economic times in a variety of ways. For instance, in this week’s Buy This, Not That, Shah took consumer spending head-on with a look at big box retailers.

These are the companies consumers rely on… in good times and bad. But as Shah explains, they aren’t all created equal.

Robert, meanwhile, has his eye on the promise of an entirely new financial system. He dug into the new tailwinds for Ethereum (ETH) in his piece here.

And Alpesh rounded us out with an income-generating play in the real estate sector. Click here to check it out.