The US economy is in a 'selective recession' as lower-income consumers can't cover the cost of living, JPMorgan says
www.businessinsider.com
Lower-income Americans are can't keep up with the rising cost of living and have blown through their savings, a JPMorgan analyst said.

The US economy is experiencing a "selective recession" where lower-income Americans are struggling due to rising costs and dwindling savings, while upper-income consumers remain unaffected. Inflation, although cooling down, has significantly impacted the purchasing power of lower and middle-income individuals. With the pandemic savings having been depleted for most Americans, recession fears are now growing as the job market weakens and interest rates remain high.

    • Droplet [comrade/them]
      ·
      1 month ago

      To be fair, this is not a recession yet.

      When consumption has dropped to a point when mass layoffs start happening, which spirals into even less consumption and even more workers getting laid off, that’s a recession - a downward spiral that becomes exponentially difficult to get out of.

      And when that happens in the US, it will send shockwaves across the world, just like the diminished consumption in the US post-2009 crash led to millions of unemployment across the world.

      But for now, America is still importing consumer goods like crazy post-pandemic and keeping the manufacturing capacity of the world exporters occupied.