The economic genie is not going back into the bottle. I know we are only supposed to pay attention to numbers like “3%”, but we notice.
Since 2019, electricity is up 29.1%, gasoline is up 49.4%, Home prices are up 54%, mortgage interest rates are up 74.4%, residential rent costs are up 32.1% and the median rental price is up 87% since 2019/2020. In that same time period, all grocery prices have increased an average of 25%, and fast food prices 28%. Eggs up 98%. Orange juice up 71%. A loaf of bread up 53%.
The average additional cost per year to an average American with middle income, since 2019, is approximately $6,317.20, assuming they own a home. If they rent instead, the additional cost would be significantly higher at about $15,917.20 additionally per year to maintain the same standard of living.
With a 2019 Median Household Income of $78,250, and a 2024 Estimated Median Household Income, $81,500 — the $12,000 deficit for a renter in just four years is devastating to their standard of living and future plans for children’s education or travel, or goods and services.
So why does the economy appear to be booming anyway? Maybe this has something to do with it?
Total U.S. credit card debt reached an all-time high of $1.115 trillion in the first quarter of 2024, up from $927 billion in the fourth quarter of 2019. This represents an increase of approximately $188 billion or 20.3% over this period.
Credit card balances have risen by $259 billion since the fourth quarter of 2021 alone.
Credit card delinquencies surged more than 50% in 2023. The percentage of credit card debt transitioning into “serious delinquency” (90 days or more overdue) rose to 6.4% in Q4 2023, a 59% increase from the end of 2022.
Debt, particularly at the current highest interest rate in 23 years, is probably not the smartest way to maintain one’s standard of living. At least not for very long.
