{"id":1468797,"date":"2024-06-01T18:00:00","date_gmt":"2024-06-01T22:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1468797"},"modified":"2024-06-01T18:00:00","modified_gmt":"2024-06-01T22:00:00","slug":"why-consumers-are-angry-about-the-economy-in-five-pictures","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/why-consumers-are-angry-about-the-economy-in-five-pictures\/1468797\/","title":{"rendered":"Why Consumers Are Angry About The Economy In Five Pictures"},"content":{"rendered":"

Why Consumers Are Angry About The Economy In Five Pictures<\/span><\/p>\n

\n

Authored by Miked Shedlock via MishTalk.com,<\/em><\/a><\/p>\n

Today the BEA released April data on inflation-adjusted income and spending. Let\u2019s discuss the charts.<\/p>\n

<\/a><\/p>\n

Data from the BEA and BLS, chart by Mish<\/em><\/p>\n

Personal Income and Wages Key Points<\/strong><\/h2>\n

DPI stands for Disposable Person Income. Disposable means after taxes.
\n\tReal means inflation adjusted.
\n\tIncome includes wages, dividends, rent and all sources of income.<\/p>\n

Workers who don\u2019t receive dividends or rental income view the world as shown by the red lines. Those who have no assets are renters.<\/p>\n

Index of Hourly Wages and Multiple Jobholders<\/strong><\/h2>\n

<\/a><\/p>\n

One reason Disposable Personal Income is up: People need to work multiple jobs just to make ends meet.<\/p>\n

This is also reflected in the blue line in the lead chart.<\/p>\n

Personal Income Four Ways<\/strong><\/h2>\n

<\/a><\/p>\n

Personal Current Transfer Receipts<\/strong><\/h2>\n

The above chart introduces Personal Current Transfer Receipts (PCTR). PCTR is income for which no goods were produced and no work performed.<\/p>\n

PCTR includes Medicare, Medicaid, disability payments, food stamps, rent assistance, and Social Security.<\/p>\n

PCTR is included in Disposable Income in all of the above charts.<\/p>\n

The green line in the above chart shows Real DPI minus PCTR. Please compare the green line to the red line.<\/p>\n

PCTR as a Percentage of Real Personal Income<\/strong><\/h2>\n

<\/a><\/p>\n

Hoot of the Day<\/strong><\/h2>\n

One of the reasons people are angry is the inflation-causing free money ran out. People increasingly have to work multiple jobs to make ends meet.<\/p>\n

CPI Up 0.3 Percent With Rent Still Rising Steeply<\/strong><\/h2>\n

Rent rose another 0.4 percent in April. Food and beverages were flat with food at home declining but food away from home rising.<\/p>\n

<\/a><\/p>\n

CPI data from the BLS, chart by Mish<\/em><\/p>\n

Key CPI Points<\/strong><\/h2>\n

Rent is up at least 0.4 percent for 32 consecutive months.
\n\tThe CPI weighs rent much higher than PCE. That\u2019s why the CPI is up 3.6 percent from a year ago and PCE only 2.7 percent.
\n\tAll of the preceding income charts would look much worse if adjusted by the CPI rather than the PCE price index.<\/p>\n

Please read those points again. The first three income charts are worse than they look if adjusted by the CPI.<\/p>\n

For discussion and additional CPI charts, please see\u00a0CPI Up 0.3 Percent With Rent Still Rising Steeply<\/a><\/strong><\/p>\n

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.4 percent in April.\u00a0Rent of primary residence has gone up at least 0.4 percent for 32 consecutive months!<\/em>\u00a0<\/p>\n

Home Prices Hit New Record High, Don\u2019t Worry, It\u2019s Not Inflation<\/strong><\/h2>\n

The Case-Shiller national home price index hit a new high in February. Economists don\u2019t count this as inflation.<\/p>\n

This is a bonus image.<\/p>\n

<\/a><\/p>\n

Case-Shiller national and 10-city indexes via St. Louis Fed, OER, CPI, and Rent from the BLS<\/em><\/p>\n

On May 2, I sarcastically commented\u00a0Home Prices Hit New Record High, Don\u2019t Worry, It\u2019s Not Inflation<\/a><\/strong><\/p>\n

That chart is one month stale now. We hit another new record in March.<\/p>\n

The Fed\u2019s Preferred Inflation Measure, PCE, Shows No Further Progress<\/strong><\/h2>\n

More weakening: Real (inflation-adjusted) Income and spending was negative in April. The PCE price index remained flat at 0.3 percent for the month and 2.7 percent for the year.<\/p>\n

<\/a><\/p>\n

Chart from the BEA, annotations by Mish<\/em><\/p>\n

Earlier today I noted\u00a0The Fed\u2019s Preferred Inflation Measure, PCE, Shows No Further Progress<\/a><\/strong><\/p>\n

This post contains four charts related to personal income and outlays discussed above.<\/p>\n

Anger Synopsis<\/strong><\/h2>\n

Consumers are angry, and it\u2019s reflected in the polls. I have been discussing the reasons for angry consumers all year.<\/p>\n

But Biden and most economists still don\u2019t get it. They think the economy is doing well. Tell that to renters looking to buy a home, stuck with rent going up month after month.<\/p>\n

People Who Rent Will Decide the 2024 Presidential Election<\/strong><\/h2>\n

On April 20, I wrote\u00a0People Who Rent Will Decide the 2024 Presidential Election<\/a><\/strong><\/p>\n

Who Are the Renters?<\/strong><\/p>\n

The answer is younger voters and blacks.<\/p>\n

The Apartment List\u00a02023 Millennial Homeownership Report<\/a>\u00a0shows Millennial homeownership seriously lags other generations.<\/p>\n

Generation Z homeownership is dramatically lower still.<\/p>\n

And according to the National Association of Realtors, the\u00a0homeownership rate<\/a>\u00a0among Black Americans is 44 percent whereas for White Americans it\u2019s 72.7 percent.<\/p>\n

That\u2019s the largest Black-White homeownership rate gap in a decade.<\/p>\n

Will the Conviction of Trump Matter?<\/strong><\/h2>\n

I doubt it. People will vote with their pocketbook.<\/p>\n

For discussion of the political side, please see\u00a0Trump Found Guilty \u2013 a Travesty of Justice for America<\/a><\/strong><\/p>\n

If you are not interested in politics, please ignore that link and focus on the rest of this post.<\/p>\n

Returning to the economy, inflation will finally come down when rent abates but there will be a price. The price is recession.<\/p>\n

I expect a recession this year. It will not surprise me at all if a recession started in 2024 Q2, perhaps April.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSat, 06\/01\/2024 – 14:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/personal-finance\/why-consumers-are-angry-about-economy-five-pictures<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Why Consumers Are Angry About The Economy In Five Pictures Authored by Miked Shedlock via MishTalk.com, Today the BEA released April data on inflation-adjusted income…<\/p>\n","protected":false},"author":0,"featured_media":1468798,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1468797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1468797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1468797"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1468797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1468798"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1468797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1468797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1468797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}