Markets In Meltdown As ‘Economic Hurricane’ Slams Into The Consumer

The situation for the consumer continues to deteriorate – hot inflation, too much debt and a rising cost of capital, a fast-cooling housing market, and a deteriorating jobs picture — including several emerging headwinds that were hardly on the radar until recently.

As always, the goal here is to keep you well-informed so that you’re able to take prudent action today to reduce your exposure to what’s ahead, and possibly even position yourself to prosper from it.

OK, first off, a reminder: consumer spending makes up nearly 70% of GDP. Where the health of the US consumer goes, so goes the US economy:

And right now, in a nutshell, the US consumer is getting squeezed.

Inflation continues to run hot, raising the cost of living to painful levels for essentials like food, rent & gas:

While at the same time, the cost of capital is rising. This impacts everyone getting a mortgage, an auto loan, or using a credit card to buy groceries. They can afford to buy less, because the debt they’re taking on now costs more.

The Consumer Is Starting To Fail, Increasing Recession Risk

Consumer spending powers the economy, making up 68% of GDP here in the US.

And, like it or not, much of that consumer spending is funded by debt — credit cards, mortgages, auto loans, etc.

But rising interest rates are now starting to make the cost of that debt more expensive.

That trend, combined with increases in the cost of living caused by today’s spiking inflation, is pinching folks’ ability to borrow and spend.

We’re seeing more and more signs

that the consumer is starting to tap out.

And should that happen, the risk of recession grows substantially.

To understand why & what to do about it, watch this new 12-minute explainer video.