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Credit Bubbles And The Decline Of The American Middle Class (Middle Class Got Jammed!)

This is a syndicated repost published with the permission of Confounded Interest. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The American middle class has suffered from painfully low wage growth since The Great Recession. In fact, 82% of Americans of suffering through the worst wage recovery since 1965. It was the first post-recession wage since 1965 without a single month above 2.7% YoY wage (or earnings) growth.

1965lbj

With shockingly low wage growth (particularly since 2008), American households are substituting consumer debt for slow wage growth. Take, for example, 1-4 unit mortgage and auto loan YoY growth. Since 1995, there was a mortgage credit bubble that eventually exploded. Now we have shifted gears and are relying on auto loan growth.

automortgage-bubble

Of course there are credit cards and student loans. While wage growth is 2.7%, student loan growth is still growing at 6.4%.

studentloandebt

Low wage growth and massive credit card and student loan debt growth. What could go wrong?

To quote Council Jamm from Parks and Recreation (again), you just got jammed!

giphyjammed

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