Repos and foreclosures increasing, yet Bidenomics succeeds.

The Hidden Truth Behind the U.S. Economy Rebound

Joe ⁢Biden has ⁢been out and about talking about the rebound of the U.S. economy and the “wins” so-called Bidenomics is creating for America.​ Television economic pundits did cartwheels earlier this month as⁣ new inflation data showed ⁢the June Consumer Price Index had fallen to 3.0%, with core CPI up 4.8%, per the Bureau of Labor Statistics. While this‍ is good news for Americans, these numbers do not tell the entire story, nor do⁤ they reflect the struggle citizens are facing every day.

The Real Inflation Picture

To begin, one must remember that the CPI measures ⁤year-over-year⁤ inflation, meaning that the June number of 3.0% was ‍3.0% higher⁢ than the number in June ⁢2022. Forgotten by most of the talking heads on television is that the June 2022 CPI was 9.1% ⁢— meaning that prices in June 2023 were, on average, 12.1% higher ​than they were just two ⁢years ago. ⁢This means that in 2023, a family with an income of $100,000 had the purchasing power of a family making ‍just under ‌$88,000 two years previously.

The Growing⁣ Debt Crisis

There is financial danger lurking as credit card debt increases, high interest rates preclude⁤ the purchase of homes⁣ and cars, and consumers are having a harder time obtaining credit.

• Credit card debt reached a record high of $993 billion in early⁤ July 2023, at a time when the average credit card interest rate ‍topped 24%. The credit⁤ card interest rate will almost certainly rise later‍ this month as the Federal Reserve is expected to increase interest rates by 0.25% at it’s ‍meeting in late July.
• Some‌ pundits believe that increasing ⁢credit card debt⁣ is a sign that people​ believe the economy⁣ is strong and that they are comfortable taking on additional debt. I ⁤disagree. 60% of⁣ credit ‌card holders have been carrying balances on their card for at least⁤ a year, up 10% from⁣ 2021. 59% of Americans‌ who earn less ⁣than $50,000 ‌a year carry a ​credit‍ card balance from month to month. These people aren’t using credit cards to purchase tickets to Hawaii and​ new TVs, they are using their cards ⁣to pay for groceries​ and to cover their rent or utility bills and⁤ paying ⁣24% interest for the privilege of‍ doing so.

The Housing Crisis

Existing home⁤ sales were down 3.3% in June, a reduction of nearly 19% compared⁣ to June 2022.‍ This should not be a surprise as mortgage rates‍ are‍ currently at 7.24% for a ⁢30-year fixed mortgage. People simply cannot afford to sell their homes and relocate. This makes sound economic sense. No one owning a home​ with a 2.5% fixed mortgage rate wants to sell their home and relocate,​ given the extra cost​ they would ​incur to purchase a similarly valued home at ⁤7.24%. This phenomenon is precluding⁣ many potential first-time home buyers from making that purchase and, in turn, is driving rental rates upwards. In addition, it is making it harder for⁢ businesses to fill key needs as fewer potential employees are willing to relocate for ⁤a new⁣ job.

The Struggle Continues

Unfortunately, ⁤many Americans can​ no longer pay ⁣their bills as both⁢ foreclosures ⁢and auto repossessions ‌continue to rise. In May, the U.S. Foreclosure Market Report “found 35,196 American properties with foreclosure filings … a 7% increase from April,‍ but ‍twice that much from 2022,” according to Go Banking Rates. In March, the last data available, the percentage of delinquent subprime auto loans increased to 5.3%, ⁤and repossessions will top 1.5 million this year.

It’s getting even​ harder for people to be approved for ⁤loans of all types, ranging from credit ‌cards to auto loans. ‍A recent New ‍York Federal Reserve survey found that the “overall rejection⁢ rate for credit applications increased‌ to 21.8% ‍year-over-year ​in June,” the highest level since June 2018. This is a bad sign for the economy ⁣as it shows ‍major banks ⁢are setting aside more money to‌ cover bad consumer loans.

So, while President Biden and economic talking heads gush over the reduced rate of inflation, every day, hard working Americans are struggling under unprecedented⁤ levels of debt and the inability ‍to obtain the credit to address it. ⁣Americans are hurting, and⁣ their​ hurt is being ignored.

Jim‍ Nelles is a ‌Navy veteran and supply chain consultant ⁣based in Chicago. His articles have‌ appeared in the Washington Examiner, Newsweek, Foxnews.com, and ⁢The⁤ Daily Wire. He has served as a chief procurement officer, chief supply chain‌ officer,⁣ and‌ chief operations ⁣officer for multiple companies.

The views expressed in this piece are those of the author and do not⁢ necessarily represent those of The ‍Daily Wire.