Important Takeaways:
- Some consumers have been weighed down by a “vibecession” for a while now — and those feelings might get worse, experts say.
- A “vibecession” is the disconnect between consumer sentiment and economic data, said Kyla Scanlon, who coined the term in 2022. Scanlon is the author of “In This Economy? How Money and Markets Really Work.”
- “It’s this idea that economic data is telling us one story and consumer sentiment is telling us another,” she tells CNBC.
- Nearly half, 45%, of voters say they are financially worse off now than they were four years ago, and the highest rate since 2008, according to NBC Exit Poll data.
- Yet economic metrics show the economy is booming.
- “Americans’ lingering frustration with the economy and their personal circumstances appears rooted in the persistently high prices that remain post-pandemic,” he said. “This makes for daily sticker shocks when buying groceries, getting a burger, paying rent and filling up the car.”
- The consumer price index, a gauge measuring the costs of goods and services in the U.S., grew to a seasonally adjusted 0.2% in September, putting the annual inflation rate at 2.4%, according to the Bureau of Labor Statistics.
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Important Takeaways:
- Denny’s has abruptly announced the closure of 150 locations in an effort to counteract poor sales.
- The chain announced 50 store closures are set to take place this year and the remaining 100 locations will be shut in 2025.
- The news comes after 15 of the chain’s locations closed this summer alone and 70 in total have closed in the last two years.
- Previously, inflation was blamed as a significant factor for the recent closures.
- Steve Dunn, Denny’s executive vice president and chief global development officer, has now said the affected planned locations are either too old to be remodeled or in areas that have become unprofitable.
- Many dine-in restaurants have felt the effects of changing consumer habits as money gets tighter and habits changed post pandemic.
- Stores like Denny’s have begun releasing offer value options to lure in customers, such as Applebee’s ‘Whole Lotta Burger’ with fries deal for $9.99 and Chili’s $10.99 burger meal that is bigger and cheaper than the Big Mac.
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Important Takeaways:
- Walgreens announces closure of nearly 700 branches nationwide. Inflation costs force the company to shutter underperforming locations.
- This move affects thousands of employees and millions of customers. Will other major retailers follow suit in this economic climate?
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Important Takeaways:
- The U.S. economy has remained remarkably strong even amid persistent inflation and high interest rates.
- And yet, 59% of Americans falsely believe that the U.S. is currently in a recession, according to a recent survey of 2,000 adults by Affirm in June.
- Citing higher costs and difficulty making ends meet, most respondents said they think a recession started roughly 15 months ago, in March 2023, and could last until July 2025, Affirm found.
- Still, regardless of the country’s economic standing, many Americans are struggling in the face of sky-high prices for everyday items, and most have exhausted their savings and are now leaning on credit cards to make ends meet.
- Economists have wrestled with the growing disconnect between how the economy is doing and how people feel about their financial standing.
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Important Takeaways:
- Even Americans earning more than six figures are worried about their finances
- A growing number of Americans making six-figure salaries are worried about paying their monthly bills, according to a new survey published by the Federal Reserve Bank of Philadelphia.
- The survey shows that more than 30% of respondents earning between $100,000 and $149,999 are concerned about making ends meet within the next six months. That marks a sharp increase from one year ago, when 21.3% of individuals in that income bracket expressed concern about making ends meet.
- At the same time, about 32.5% of individuals earning more than $150,000 are worried about being able to pay their bills, which also marks an increase from the 21.7% figure reported one year ago.
- Interestingly, those more affluent Americans are actually more worried about their finances than many individuals who are earning less money. About 29.8% of individuals making between $40,000 and $69,999 said they are concerned, up from 23.9% last year.
- The typical U.S. household needed to pay $227 more a month in March to purchase the same goods and services it did one year ago because of still-high inflation. Americans are paying on average $784 more each month compared with the same time two years ago and $1,069 more compared with three years ago.
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Important Takeaways:
- McDonald’s Launches $5 Meal Deal as Fast Food Prices Soar 33% Under Biden
- Fast food chains are under pressure to put the “value” back into a “value meal” after fast food prices soared 33 percent since 2019, according to the Department of Labor. Grocery prices, for context, increased 26 percent.
- The new $5 meal includes a choice of either a McDouble or McChicken sandwich, small fries, four-piece Chicken McNuggets, and a small soft drink, Axios reported.
- The $5 dollar deal contrasts the price of the Big Mac Value Meal. A Big Mac burger, a medium beverage, and a medium fries meal now costs $18 in some locations, up $10 from 2018 when former President Donald Trump was in office.
- The McDouble sandwich, which costs $1.19 on average in 2014, costs $3.19, almost three times that amount. Medium fries increased from $1.59 to $3.79, the New York Post reported.
- McDonald’s ten-piece McNugget meal, the $10.99 combo that includes fries and a drink, costs $5.00, 83 percent more expensive than in 2014.
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Important Takeaways:
- How it started… how it’s going: Cost of living still way up compared to pre-Biden norm
- President Biden welcomed Wednesday’s inflation report that showed prices rose less than expected in May, but the cost of living for millions of Americans is still much higher than it was before he assumed office.
- Data from the Labor Department confirms that housing expenses, energy and vehicle maintenance costs have all increased by double digits since January 2021.
- As of May, shelter costs are up 21.4%, home prices have increased 33.9% and rent is up 21.4%, according to indexes tracked by the Bureau of Labor Statistics. Mortgage rates on a 30-year fixed loan have shot up to an average of 6.99% as of June 6, 2024, from 2.77% in January 2021 — a whopping increase of 152%, according to Freddie Mac
- Gas prices are currently sitting at a national average of $3.45 per gallon, down from $3.50 last week as low demand and increasing supply provide relief at the pump, AAA said. But overall, today’s prices are still 45% more expensive than in January 2021, when it cost $2.38 per gallon to fill up.
- Electricity costs are up about 29% since Biden took office.
- It also costs more to buy a car (20.4% increase), maintain it (30.5%) and insure it (51.3%) than it did four years ago.
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Important Takeaways:
- More than a quarter of Americans have resorted to skipping meals to avoid paying inflated grocery store prices, according to a new survey.
- According to a study by Qualtrics on behalf of Intuit Credit Karma, 80% of Americans say they have felt a “notable increase” in grocery costs in recent years. More than a quarter of respondents said the increased cost has led them to occasionally skip meals, while about one-third said they spend more than 60% of their monthly income on mandatory expenses such as food, utilities and rent.
- “Food insecurity is a major issue in this country as millions of Americans don’t have enough food to eat or don’t have access to healthy food,” Courtney Alev, a consumer financial advocate at Credit Karma, said in a statement.
- Of the Americans surveyed in the Credit Karma poll, 44% reported feeling financially unstable. This feeling is strongest among households making less than $50,000.
- The rising cost of living is also a likely factor in the increasing number of Americans taking on debt (55%).
- A large majority of consumers (80%) said they felt the most notable increases in expenses were for groceries, followed by gasoline, utilities, housing and dining out.
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Important Takeaways:
- Raising a child is getting more expensive – but the problem is worse in these 5 states
- High inflation has made the price of just about everything in the U.S. more expensive — including how much it costs to raise a child.
- “The cost of everything is rising,” said Matt Schulz, LendingTree chief credit analyst. “There’s so much that goes into child care, including rent, payroll, insurance and much more. When all those costs shoot up, the overall cost of child care does, too.”
- The cost of child care surged nearly 20% between 2016 and 2021
- That means the typical family is spending about $237,482 over the course of 18 years to raise a child — and that is excluding the cost of college.
- However, new research published by SmartAsset suggests that the problem is even worse in some states.
- Raising a child in Massachusetts costs an estimated $35,841 a year – the most expensive state in the country and nearly double the national average.
- The annual cost of raising a child in Hawaii is $35,049, which includes about $19,500 for child care. One of the largest expenses in the Aloha State is housing, according to the study. Adding a child to a two-family household costs an additional $6,188 per year. By comparison, that adds about $4,983 in Massachusetts.
- It is notably cheaper to raise children in a handful of Southern states.
- Mississippi ranked as the least expensive, coming in with a total cost of $16,151. That is followed by Arkansas, Louisiana, Kentucky and Alabama.
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Important Takeaways:
- Many Americans consider fast food to be a ‘luxury’ good since prices have skyrocketed
- Fast food is beloved in America because it is cheap and convenient.
- At least it used to be.
- The recent inflation report for April showed that since President Biden took office, the cost of eating out at restaurants is up nearly 22%. However, fast food has been hit particularly hard, with prices dramatically rising at the most popular restaurant chains beginning even before the COVID-19 pandemic.
- Gone, too, are the days of the $5 Footlong at Subway. A BLT Footlong that cost $5.50 in 2019 now costs customers $8.49 in 2024, though prices can vary by location. Additionally, Chipotle’s beloved chicken burrito that cost $6.50 in 2019 now runs customers $10.70.
- Fast-food executives have pointed to rising wages and increased costs for ingredients as factors driving up the prices on their menus.
- Data from the Federal Reserve Bank of St. Louis shows that fast-food prices have actually increased faster than the average hourly earnings of most employees at fast-food restaurants. Fast-food prices have also outpaced inflation, rising 41% from 2017, while the consumer price index has increased by 35.9%.
- A recent survey conducted by LendingTree found 78% of consumers now consider fast food to be a “luxury” purchase due to how expensive the meals have become.
- The financial strain means fewer people are visiting the drive-thru. The findings show three out of four Americans typically eat fast-food once a week, but 62% of respondents said they are eating it less frequently due to the cost.
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