One Paycheck Away From Disaster For Most US Consumers
By Michael Snyder/Economic Collapse Blog November 03, 2023
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Despite the fact that our politicians in Washington have been borrowing and spending trillions of dollars that we do not have in a desperate attempt to prop up the economy, living paycheck to paycheck has become a permanent lifestyle for most Americans. In other words, well over half of the country is literally living on the brink of financial disaster.
When you are living paycheck to paycheck, there is no room for error. A job loss, a business failure or a medical emergency can mean complete and utter financial ruin if you don't have a cushion to fall back on. That is why the results of a brand new survey are so alarming.
According to a report that was just released by LendingClub, 62 percent of all U.S. adults were living paycheck to paycheck last month...
High inflation and higher interest rates continue to weigh on American households.
As of September, 62% of adults said they are living paycheck to paycheck, according to a new LendingClub report.
For years, people like me have been warning Americans not to live like this.
Living paycheck to paycheck only works if the paychecks keep coming in every month.
Once they stop, you are at risk of losing everything.
Unfortunately, living paycheck to paycheck is "the main financial lifestyle among U.S. consumers" at this point...
"Living paycheck to paycheck remains the main financial lifestyle among U.S. consumers," the report said.
When you live on the edge, even a relatively minor event like an unexpected vehicle repair can become a major crisis.
That probably helps to explain why a different survey found that a whopping 74 percent of all Americans are "stressed about finances"...
Some 74% of Americans say they are stressed about finances, according to a separate CNBC Your Money Financial Confidence Survey conducted in August. Inflation, rising interest rates and a lack of savings contribute to those feelings.
When millions of workers lost their jobs in 2008 and 2009, vast numbers of Americans that were living paycheck to paycheck lost their homes because they could no longer pay their mortgages.
Unfortunately, another wave of massive layoffs has begun.
In fact, this month it appears that tech layoffs have started to surge once again...
In October, Nokia announced it was laying off 14,000 employees following a quarter that saw profits drop by 69%, and other major tech companies like Qualcomm, Qualtrics, and LinkedIn also announced significant layoffs.
Unfortunately, much greater economic troubles are on the way, and most Americans are deeply concerned about what the months ahead will bring.
According to a survey that was just released by Chapman University, 55 percent of Americans are either "afraid" or "very afraid" that we are heading into an economic or financial collapse...
Meanwhile, economic concerns in America are increasing, the survey showed. Since the first such survey by Chapman University in 2013, at least one fear related to the economy has appeared in the top 10.
This year, fear of economic or financial collapse was second on the list, increasing from last year when it ranked number 8. This year, nearly 55 percent of respondents said they were very afraid or afraid of the matter.
"Considering this year's high interest rates, high inflation, and unexpected banking crisis; economic recession was something a lot of Americans were afraid of, helping to explain why fear of economic/financial collapse ranked so high," Mr. Andrus said.
We have already been through some intense economic turbulence over the past few years.
But greater pain is on the way.
At this point that is so obvious that even the normally rabidly optimistic National Association of Business Economists is warning of "a more challenging business environment as the economy slows"...
The nation's leading economists stopped short of forecasting a full-blown recession, but they do see headwinds for the U.S. economy.
"The October 2023 Business Conditions Survey results suggest a more challenging business environment as the economy slows," said National Association of Business Economists (NABE) president Ellen Zentner, chief U.S. economist, Morgan Stanley.
For once, they are right on target.
The U.S. economy really is slowing down.
And the European economy is slowing down too...
The euro area economy risks falling into recession later this year after official data Tuesday showed that output shrank slightly in the third quarter.
Gross domestic product across the 20 countries that use the euro fell 0.1% in the July-to-September quarter compared with the previous three months, according to an initial estimate published by Eurostat, the European Union's statistics office.
The dip follows a rise of only 0.2% in the April-to-June quarter and highlights the fine line between contraction and growth in the eurozone. GDP was stagnant in the final three months of 2022 and the first quarter of this year.
Even in a best case scenario, the path ahead is going to be very rocky for the global economy.
But what is going to happen if the flow of oil from the Middle East is restricted or cut off for an extended period of time?
That really would be an economic nightmare for the whole world, because 31 percent of the world's oil comes from the Middle East.
A global oil crisis would deeply affect all of us, because our entire way of life is predicated on cheap energy.
So it will be important to watch events in the Middle East very closely.
If Hezbollah and Iran join the war, things are going to start getting really crazy very rapidly.
Originally published at The Economic Collapse Blog - reposted with permission.
