If you thought the American consumer was financially squeezed before, brace yourself for a reality that’s far worse than you imagined. Amid geopolitical tensions, exploding national debt, and deficits, the last thing you want to do is bury your head in the sand. The latest data on real and nominal wages reveals a grim picture that demands immediate attention.
The Unsettling Data: Real Wages in Freefall
The Federal Reserve’s Eye-Opening Chart
A recent chart from the Federal Reserve shows that real median household incomes in the United States have plummeted since the onset of the pandemic. Prior to the crisis, the average household income, adjusted for inflation, was nearly $80,000. Now, it’s below $75,000. That’s a staggering $5,000 drop per year.
CBS Report: The State-by-State Breakdown
A CBS report adds another layer of complexity to this dire situation. While aggregate nominal wages may be increasing, a state-by-state breakdown reveals that nominal wages are actually falling in 17 states. This is not just a nightmare; it’s a catastrophe for the average American who is already grappling with rising consumer prices.
The Regional Disparities: A Closer Look
States Struggling the Most
Among the states where nominal incomes have gone down are Oregon, Illinois, Minnesota, and Wisconsin. New Hampshire saw a shocking 5.9% decrease in nominal wages. Even in states like Alabama and Florida, where nominal wages have increased, the rate is not keeping pace with inflation.
The Older Population’s Plight
Many states experiencing a decline in incomes have older populations. While some might argue that retirees leaving the labor force could skew these numbers, the data suggests otherwise. The decline in real wages is too significant to be solely attributed to demographic changes.
The Consumer Sentiment: A Downward Spiral
Consumer confidence has been waning, particularly in the Midwest. This decline coincides with the depletion of additional savings from stimulus checks and other pandemic support. As we move into 2024, this is likely to become an even bigger problem, especially if the inverted yield curve proves to be a reliable indicator of an impending recession.
The questions on everyone’s mind are: Should I buy gold? Silver? Bitcoin? Commodities? Treasuries? Or should I stay in cash? The path forward is murky, but the need for a well-thought-out strategy has never been more urgent.
The declining real and nominal wages are not just numbers; they are a distress signal that we can’t afford to ignore. As we stand up for freedom, liberty, and free-market capitalism, let’s also arm ourselves with the knowledge and strategies to navigate this financial squeeze. Mark your calendars for the upcoming livestream that promises to be an invaluable resource in these trying times.