"Solid Footing"... How Is The Average Joe Really Doing?

Tyler Durden's picture

Authorted by Steven Hansen via StockBoardAsset.com,

When some think of the economy, they think of GDP. When I think of the economy, I try to visualize the average Joe and how he or she is doing.

According to Federal Reserve Governor Lael Brainard:

Overall, the U.S. economy remains on solid footing, against the backdrop of the first synchronized global economic growth we have seen in many years and accommodative financial conditions.

 

This benign outlook is clouded somewhat by uncertainty about government funding and the fiscal outlook, and geostrategic risk has risen ….. Of course, the likely economic effects of Hurricane Harvey raise uncertainties about the economic outlook for the remainder of the year.

Yes, employment seems to be improving (I look at employment-population ratios) – although it remains far from excellent.

And average wages (blue line in graph below) seem to be improving (really difficult to monitor median incomes in real time). It’s all good if you have a job.

Indexed Real Wages and Salaries (Q1 2008 = 100) Per Employee

The red line on the above graph is real median household income which lags over one year.

But the chart which concerns me is consumption versus spending.

The ratio of spending to income has been very elevated since September 2016. There have been only three extended periods in history where the ratio of spending to income has exceeded 0.92 (the months surrounding the 2001 recession, from September 2004 to the beginning of the 2007 Great Recession, and since September 2016).

Seasonally Adjusted Spending’s Ratio to Income (an increasing ratio means Consumer is spending more of Income)

And personal savings rate nears historic lows.

Seems to me the average Joe is living from hand-to-mouth with little left over.

This kind of trend increases financial inequality – and tends to create a big brother government which assists the average Joe to survive.

The American middle class has been rotting away for decades..

The Top .01% is not sharing the wealthy with the bottom 50% income earners, which has produced massive wealth inequality gaps. Such gaps usually happened around an economic and social crisis.

 

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FreeShitter's picture

20% doin ok, 80% in some sort of hell.

Fake Trump's picture

Trump will fix that. In Trump we trust.

in4mayshun's picture

Nigga Please. Go sell crazy somewhere else!

ElTerco's picture

Yep, still waiting for even the tiniest bit of evidence of this.

Ben A Drill's picture

Treading water here. If the commute doesn't kill me then job stress will.

Haven't been able to buy any silver in over a year.

ET's picture

Silver is under $20 per ounce.

You can buy Silver Coins smaller than an ounce.

JimmyJones's picture

He failed to mention he has a drinkng problem as well.

Ben A Drill's picture

I drink only once all day long.

Nobodys Home's picture

I don't drink any more. Any less either!

A. Boaty's picture

"I never drink water because fish fuck in it."

- W.C. Fields

toady's picture

I drink only once; all day long.

FIFY

Ben A Drill's picture

. Taken. Thanks English teacher.

Ben A Drill's picture

That's like buying one bullet at a time.

JelloBeyonce's picture

Or you can dumpster dive (aka, urban prospecting). 

I just found over 15 lbs of silver flatware (sterling) that some schmuck threw away in the trash.

 

Five Star's picture

The average joe has never had to work longer to buy the same qunatity of stocks. Not even during the dot-com bubble

http://thesoundingline.com/us-equities-are-the-most-expensive-ever-in-te...

I am Jobe's picture

Becoming a joke. Average joe can't afford anything. Going to be interesting soon. Forget about fucking Christmas. 

ET's picture

Christmas was never about commercialism.

Maybe we will see a return to its true meaning.

JimmyJones's picture

1970 average Joe, had a home, had 2 cars, had kids, took vacations, wife could work but also could stay at home and raise the kids without breaking the bank.  HS diploma could get you a decent job to afford this.  Today is quite a diffrent story.

Fake Trump's picture

This is America. Stop telling the average American not to buy China products. Can they afford to buy clothes from Paris or Milan? 

JimmyJones's picture

US first, then Canada, then Mexico, the key is keeping the "dollars" as close to home as possible.

Squid Viscous's picture

gas prices here are up 60 cents/ gallon since mid august, with no signs of coming down

suck it Joe! see you at the dollar tree store

 

Bill of Rights's picture

Trust me the Middle class know exactly what they mean by " Solid " at least our asses   do.

Ron_Mexico's picture

"We'll put a boot in your ass. It's the American way."

cynicalskeptic's picture

'Middle Class?!?' - what's that?     'Working class' with higher debt levels?

hooligan2009's picture

for the classic libtard socialist (and hillary donor) brainard - if the economy more closely resembles a socialist utopia of zero growth with massive increases in debt - the economy is on a "solid footing".

https://www.washingtonpost.com/news/wonk/wp/2016/04/21/top-federal-reser...

Enceladus's picture

I think we need to start looking at cultural and spiritual inequalities. In those matters many of us are not in to bottom 80% nor the top 20%.

MortimerDuke's picture

So if we're not in the bottom 80%, and we're not in the upper 20%, where exactly are we?  Another dimension?  And what exactly would "spiritual inequalities" look like?  What about "cultural inequalities"?  Is culture quantifiable?  Is spirituality?  Maybe we should talk about the inequaliities in the quality of our weed.  You clearly "have access" to the upper 1%.

small axe's picture

the central bankers' efforts to destroy the middle class have paid off in spades. And the real beauty of the scheme is that people have come to accept that the trickle-up economy is somehow good for the majority of people. Oh well.

user_name's picture

first synchronized global economic growth

 

LMAO!  Synchronized collusion you mean?


hanekhw's picture

I'd say from the lack of savings or cash on hand I'd say pretty lousy. Average Americans can't meet the costs of simple problems without borrowing.....or selling or stealing.

 

In China there's an old expression translated as "....when the rich get too rich and poor too poor the mandate of heaven changes".

Ron_Mexico's picture

yah, so how's that one working out in North Korea?

Angry White Guy's picture

The average Joe can't put any distance between his shitty stagnated wages and the outrageous out of control cost of living in this country (thanks Jew Fed).

The average Joe is told to be happy with his 2.4% cost of living 'merit raise' while rent soars 20% annually and healthcare soars 25-30% annually.

Then the companies turn around and wonder why no one has any money and no one is buying.

If it wasn't for EBT cards you'd see bread lines in every major city and most suburbs.

The entire country is living a debt fueled lie and someday soon (Christ I HOPE) the peasentry will wake up and revolt.

Something has to give.  Reality HAS to win over...right?

JimmyJones's picture

The EBT program is what is allowing this to get so much worse then it would normally be.  people would of already revolted if they weren't pasified by the EBT.  I too cannot wait for the system to just break and that is why I encourage everyone to take every benefit availible.  Overload it and break it.  We sure as hell know they will not clean up the abuse of the socalled "safety net".

cynicalskeptic's picture

Rome figured this out a long time ago. 

Bread and Circuses

Make sure the masses are fed enough to keep them from starving and entertain them, keep them distracted.

You've got people living from check to check who have huge flat screens playing Grand Theft Auto or whatever in the time they're not working.   You've got people not working doing the same.

REAL UNEMPLOYMENT is 24% - as bad or worse than 1932.

The only reason you're not seeing people selling apples on corners is that they're selling off anything they can on eBay now.

BenBache's picture

The voting class has done this to the working class by supporting evil war mongering plutocrats in every election.  War means poverty for the many and wealth for the few.  The taxpayers pay for wars and the rich profit.  Every time someone fires off a missile, or pretends to fire a missile, the taxpayers pay to replace it.  The lower classes have taxes taken out of their pay checks.  They have no deductions.  They pay sales taxes.  They effectively pay real estate taxes for their land lords.  Voter = War Mongering Lover of Inequality and War.

JimmyJones's picture

Lets see, Obama said he would end the wars and bring the troops home, he lied to the people that voted for a "change".  Trump promised much of the same, the people voted for him, how much longer till we can say he just lied or he tried and the RINO/Liberal Globalist are preventing him?  I give him 6 more months but I am starting to see that the Globalist are well entrenched.  The people have choosen peace many times now only to have been lied to again and again and again.

CRM114's picture

This is likely to become a war between the intelligent, hardworking and unselfish vs the lazy, stupid and selfish. The intelligent and selfish (politicians, TPTB; whether hardworking or not) have sided with the lazy and stupid. The battle is for the hardworking, unselfish and, well, I won't say stupid, let's those who can't figure out the truth in this complex scenario on their own. Many of the unselfish, worldwide, are currently being played by exploiting their emotive sympathies for migrants and minorities.

Giant Meteor's picture

"... Overall, the U.S. economy remains on solid footing, ..."

The funde MENTALS of the economy are strong !

LoL

Start shorting everything with both fists ..

JimmyJones's picture

Good luck with that, the market can stay irrational longer than you can stay solvent.

user_name's picture

With the "markets" lately, shorting with both fists means you get fisted twice

user_name's picture

Savings are down, wages are stagnant and personal debt is up.  In today's world, that = economic growth

CRM114's picture

The problems, not just in the US:

1) The Government are the only organisation large enough to be able to collect enough data for an honest opinion, but they have doctored all the indices for political reasons (i.e. getting elected/re-elected)

2) The MSM have completely given up on investigative journalism, so won't challenge the above. i.e. they are incapable now of finding the truth, even if they were inclined to publish it, which they no longer are either.

3) The ability to have reasoned discussions between people of opposite views has all but disappeared, both in and out of the public eye.

4) Whether or not the situation is dire, TPTB suspect that it is, and therefore are absolutely not going to allow anything (like realistic stats)  which might reveal the truth.

The end result is that in which we find ourselves on ZH; we are pretty convinced from both anecdotal data and fundamentals that a crash is coming, but we don't know when, don't know what will trigger it; and can't prove the crash is coming because we've only got anecdotal evidence and the paid economists disagree with our models of the economy.

So, we prepare, and we wait.

LikeAFreak's picture

The only way I can make it is to marry a foreigner and not have a domicile in the USA.  Like the illegals, though I do come back to work, but I don't spend any more than I have to there.

Nobodys Home's picture

"When I think of the economy, I try to visualize the average Joe and how he or she is doing."

When I think of the economy, I try to visualize the average Joo and how he or she is doing.

I'll buy a vowel please.

I Write Code's picture

Nothing is improving for the average Joe, those employment numbers are only keeping up with population growth, wages are only keeping up with inflation, and you have to segregate out the numbers from the top 1% to see what Joe gets anyway.

user_name's picture

Wages are keeping up with the Fed's inflation numbers.  In reality, wages lag far behind real inflation. 

Angry White Guy's picture

Wages are NOT keeping up with inflation.

YourAverageJoe's picture

No, they are definetely not, and I bring that matter up at every annual review.