Economic Tipping Point Coming - Consumers Are Just About Tapped Out
By Michael Snyder/Economic Collapse Blog October 22, 2024
Share this article:
A recent survey discovered that 79 percent of Americans believe that the U.S. is on the wrong track right now. As a nation, we may not agree on much, but this is one thing that almost all of us can agree on. Needless to say, the economy is the number one reason why so many people are dissatisfied with the direction that the country is heading.
Over the past four years the cost of living has risen much faster than paychecks have, and as a result our standard of living has been going down. Now we have reached a point where tens of millions of U.S. consumers have been squeezed bone dry, and as a result businesses are failing all over the nation.
Traditionally, the performance of the home improvement industry has been a very important economic harbinger.
And at this moment the home improvement industry is really struggling.
For example, True Value has been doing so poorly that it was finally forced to file for bankruptcy...
True Value, a 75-year old hardware store brand, has filed for bankruptcy and is selling substantially all of its operations to a rival, the company announced Monday.
In a press release, True Value said it will continue day-to-day operations of selling hardware and other homeware tools to its 4,500 independently operated locations during the Chapter 11 process, which includes a $153 million stalking horse bid from rival company Do it Best.
Meanwhile, Home Depot says that sales in 2024 will be down quite a bit from 2023...
The home improvement retailer said it now expects full-year comparable sales to decline by 3% to 4% compared with the prior fiscal year. It had previously expected comparable sales, a metric that takes out the impact of store openings and closures and other one-time factors, to decline about 1%.
In an article that I posted last week, I mentioned that Home Depot has been dumping millions of square feet of warehouse space.
They wouldn't be doing this if they thought that the economy would be turning around any time soon.
Another giant in the home improvement industry, PPG, has decided the time has come for mass layoffs...
PPG -- a global manufacturer of paints, coatings, and specialty materials -- is laying off nearly 2,000 workers as it trims operation costs and sells off a chunk of its architectural business.
The cuts will impact about 1,800 positions, primarily in the U.S. and Europe. PPG didn't disclose when the layoffs would occur.
The Biden administration continues to insist that all is well, but the home improvement industry is telling us a completely different story.
Meanwhile, drug stores continue to shut down all over the nation at a staggering pace.
In fact, Walgreens just announced that it will be permanently shutting down 1,200 stores...
Walgreens said on Tuesday it would shut 1,200 stores over the next three years as new CEO Tim Wentworth plots a turnaround at the struggling pharmacy chain operator hit by sluggish consumer spending and low drug reimbursement rates.
You don't shut down more than a thousand stores if you believe that good times are ahead.
Let's be real.
The restaurant industry is also being hit extremely hard in this difficult economic environment.
Last week, I was saddened to learn that TGI Fridays has been closing locations all over the country...
Your ability to enjoy a plate of loaded potato skins and $5 happy hour drinks is slowly dwindling, as TGI Fridays has closed 12 U.S. locations in the past month and shuttered 35 restaurants across the pond.
According to the company's location section on its website, multiple TGI Fridays locations in the Northeast closed last week, including in Clifton Park, Middletown and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia.
Additional closures from earlier this month took place in the Southeast and Midwest regions, in states like North Carolina, South Carolina, Wisconsin, Michigan and Indiana, as well as two locations in Minnesota.
If TGI Fridays anticipated that economic conditions would soon turn around, they would try to keep these restaurants open.
But the truth is that the writing is on the wall.
Even churches are feeling the pain. According to a recent study that was conducted by Lifeway Research, giving has been falling from coast to coast...
A majority of Protestant pastors are blaming a poor economy for their struggling bottom lines after experiencing double-digit declines to zero improvement in financial offerings from churchgoers over the last year, data from a new study released by Lifeway Research show -- but the sentiment is divided along political lines.
"National trends of a favorable stock market along with unfavorable inflation and interest can influence a local congregation's finances, but so do more local factors that contribute to economic problems or prosperity in the church's community," Scott McConnell, executive director of Lifeway Research, said in a statement on the study. "In general, pastors have turned a little more negative in describing economic forces impacting their church this year."
What do all the examples that I just shared with you have in common?
They all show that most consumers don't have a lot of discretionary income to spend right now.
Or as Gerald Storch put it during a recent interview with Maria Bartiromo, "consumers are running out of money"...
US corporate media outlets continue to push propaganda that the economy thrives ahead of the presidential elections, cheerleading the most recent retail sales print. However, most Americans know MSM is full of 'malarkey' because inflation and interest rates force many to spend more but receive less.
Many folks have depleted their personal savings and racked up insurmountable credit card debt just to keep up with rising food, energy, insurance, and shelter costs. This toxic mix of inflation, sparked by failed Bidenomics, has hit low- and middle-income families the hardest, potentially leading to a breaking point this upcoming holiday shopping season.
"It's very clear that consumers are running out of money. They're increasingly stressed by inflation and the exhaustion of their pandemic-era savings. When you take a look over the last several years, what you see month after month, everyone talks about, the consumer's still spending. They might be, but they're spending less than the growth of inflation," Storch Advisors CEO Gerald Storch told Fox Bussiness' Maria Bartiromo on Thursday during an interview.
That is the bottom line.
Millions of U.S. consumers have been squeezed and squeezed and squeezed and now they are bone dry.
I previously warned my readers that we were approaching an "economic tipping point", and now things are starting to roll downhill very rapidly.
Originally published at The Economic Collapse Blog
