Economic Data Paint a Picture of Two Americas

 

 “Consumers are strong, our consumers that we chase are especially resilient and strong,” Mark Kempa, chief financial officer of Norwegian Cruise Line Holdings, said

The upper cohort in the U.S. mostly own their homes, and the lion’s share are likely sitting pretty with ultralow mortgage rates taken out or refinanced during the pandemic.

They are also benefiting from an effervescent stock market, including downright euphoric valuations for anything associated with the promise of artificial intelligence. 

They also aren’t struggling with high rates on credit card or auto loans. Instead, high interest rates are actually supplying them with record levels of investment income 

It is this cohort, whether by splurging on vacations or further bidding up Nvidia shares, that is making it harder for the Federal Reserve to get comfortable cutting rates.

Aaron Back Wall Street Journal 8 June 2024

https://www.wsj.com/economy/consumers/economic-data-paint-a-picture-of-two-americas-fb10e908

Americans are sitting on a record amount of tappable home equity at $11 trillion

Home equity loosely corresponds with how much housing wealth one has: It is the difference between how much a homeowner owes on their mortgage and the market value of their house. 

https://englundmacro.blogspot.com/2024/05/the-picture-keeps-growing-brighter-for.html

The capitalization of the S&P 500 has surged by about $30 trillion in the past decade

https://englundmacro.blogspot.com/2024/06/these-are-bad-times-to-be-bear-on-wall.html