Recent survey results indicate that nearly 40% of Americans are concerned about their ability to pay all of their bills on time.
The current inflation rate under the Biden-Harris administration has exceeded that of the Great Recession of 2008-09, leading to a 33% increase in the number of Americans worried about consistently meeting their financial obligations.
This percentage is now higher than during the 2008 crisis, when unemployment was nearly 10%.
Although inflation has slightly eased in recent months, it continues to impact the costs of essential items such as food, gasoline, housing, and utilities, making it challenging for consumers to adjust to these price increases.
The Daily Signal, citing the survey, reported:
Still trying to catch up is an understatement. The gap between nominal wages and inflation-adjusted wages since 2021 is more than 20%. So, it looks like you’re making a lot more, but even accounting for official inflation, workers have lost thousands in income.
Of course, if official inflation is a lie, which seems likely, going by real-world prices from housing to restaurants and groceries, then workers have lost a lot more.
To illustrate, official inflation since COVID-19 is 21%, but fast-food menu prices—a standard finance proxy for true inflation—are up more than twice that, while housing costs have doubled since COVID-19, between rising house prices and rising mortgage rates.
If those real-world numbers are closer to true inflation, then workers have lost potentially thousands per month.
According to CNN, over a third of respondents, or 35%, have taken on extra part-time work to meet their financial needs. This figure includes 44% of black Americans, 52% of Latinos, and almost half of workers who are under 45 years old.
“That explains why jobs are rising on paper, yet the actual number of employed Americans is plunging—down 600,000 in the past eight months alone,” the Daily Signal added.
The survey revealed that over 66% of Americans are reducing their grocery spending, and nearly 50% are driving less to cut down on gas expenses. Furthermore, 40% of Americans are resorting to using credit cards to cover necessary costs such as groceries and fuel.
Data released earlier this month by the Labor Department showed that employers added only 114,000 jobs in July, below the anticipated gain of 175,000 predicted by LSEG economists.
Unexpectedly, the unemployment rate rose to 4.3% from 4.1%, contrary to expectations of it remaining steady.
“It marked the highest level for the jobless rate since October 2021,” Fox Business reported.
“Temperatures might be hot around the country, but there’s no summer heatwave for the job market,” Becky Frankiewicz, president of ManPowerGroup North America, told Fox Business. “With across-the-board cooling, we have lost most of the gains we saw from the first quarter of the year.”
The economy continues to show signs of weakening as a result of persistent inflation and high interest rates, as indicated by the latest Labor Department report.
This has led to a significant drop in stock futures earlier this month, raising concerns about a potential recession. Last week, Dow futures plummeted by over 500 points.
The rise in unemployment has triggered the implementation of the Sahm Rule, an early indicator of a recession. According to this rule, a recession is likely when the three-month average of the unemployment rate is at least 0.5% higher than the lowest rate in the past 12 months.
In the last three months, the average unemployment rate has been 4.13%, which represents a 0.63 percentage point increase from the 3.5% rate recorded in July 2023. Fox Business reports that the Sahm Rule has accurately predicted every recession since 1970.
