Joe Biden and his D.C. cronies have touted for years that the economy is strong, and the nation is in great financial shape. What Biden and gang continually forget is that inflation remains high, and the nation is more than $30 trillion in debt while American consumers are swimming in personal debt.
People have been forced to tap their savings and fall deeper into debt with credit cards to maintain spending. This financial scenario has pushed inflation higher and caused consumers to run afoul of credit card companies.
With each new national financial report, the signals grow that a significant economic downturn is ahead. Andrew Hollenhorst, chief U.S. economist at Citi, is warning that things could get worse when it comes to the economy and just in time for Biden to get all the credit during an election year.
From the Daily Caller:
The Consumer Price Index rose by 3.1% year-over-year in January, exceeding a predicted 2.9%, while credit card delinquencies of 90 days or more reached 6.36% in the fourth quarter of 2023. Hollenhorst told CNBC host Sara Eisen that he did not believe that data pointed to a “soft landing” for the U.S. economy.
“There’s this very powerful and seductive narrative around this being a soft landing and we’re just not seeing it in the data. I think that’s what we’ve seen over the past couple of days,” Hollenhorst said.
Hollenhorst predicted that the data is pointing to the American economy cruising toward a recession. He believes the higher inflation numbers and growing credit card delinquencies are the perfect storm to set off a rough run for the economy and Americans.
Hollenhorst said it is important to watch how the economy moves forward when it comes to the labor market. He cited how people are working fewer hours and the number of full-time workers is dropping.
“I think that’s the key to the economy, is what happens in the labor market,” Hollenhorst said.
If unemployment remains low, people will likely continue to spend which in turn keeps the economy rolling, he said. But if unemployment begins to rise, which is the expectation of economists, Hollenhorst said this could lead to a “more material decline in activity in the U.S. economy.”
Credit card delinquencies, according to Hollenhorst, suggested that people are exhausting their savings. This could lead to less spending and a slowing of the economy, he suggested. Inflation could slow from there, but the end result could be something other than a soft landing for the economy.
If Hollenhorst’s prediction holds up, the recession could hit as the fall election season heats up. More bad news about the economy and Americans struggling financially likely won’t benefit Biden’s chances of holding onto the White House.
Key Takeaways:
- A top Wall Street economist predicted an upcoming recession in time for the fall elections.
- Any economic downturn this year could significantly undermine Biden’s reelection bid.
- Inflation continues to run high and credit card delinquencies have jumped higher.
Source: Daily Caller
