Recession already here for many Americans, as buying power, credit, social net shrinks

Published

2 years ago

April 20, 2023

admin

The stock market may be closely watching the chance of an official economic recession, but many Americans across the country are already feeling the squeeze as they contend with higher prices and borrowing costs than they saw a year ago.

While Evelyn Canela, 31, a senior program director at a nonprofit based in Harlem, said she thinks she has a “well-paying job,” which paid in the $100,000-range when she first started, she also said she’s been feeling the pressure to save, particularly as various industries have seen more layoffs in recent months.

In a poll released by Morning Consult last month, almost half of respondents believed the nation was already in a recession.

The poll also found that about 41 percent of Americans surveyed had begun taking precautions and steps to beef up savings, but a closer look at the data revealed disparities by income.

Adults in households with annual earnings above $100,000 were more likely than others to say they were beginning to prepare for an economic downturn or recession, with 52 percent saying they’d taken to stockpiling goods or food, cut back on spending or other steps.

By contrast, the poll found that those in households that earned under $50,000 annually were more likely to say they had not yet begun to make preparations “but wish they could.”

The poll comes as recent months have seen more Americans are feeling poorer and pessimistic about the nation’s economic forecast at a time that rising price stickers are putting a squeeze on pockets across the spectrum. Job seekers line up outside the New Hampshire Works employment security job center in Manchester, N.H.(AP Photo/Mary Schwalm, File)

At the same time, data shows credit card debt is also on the rise; a March study from Wallethub found “credit card debt increased by $85.8 billion during Q4 2022 – the highest quarterly increase ever recorded.” Job losses are cutting into spending power, even for six-figure earners

Recent months have also seen big layoffs, particularly in the tech industry as high-profile companies like Google, Apple and Amazon have announced plans to cut jobs. Other businesses like Goldman Sachs have also unveiled plans for thousands of layoffs this year.

“I’ve always been saving, but I’ve been way more aggressive more recently. I’m not in the tech field, but I’ve seen these massive layoffs,” Canela said. “It’s a very scary thing when people in your close circle have lost their jobs.”

Research has shown more consumers making more than $100,000 annually say they’re living paycheck to paycheck.

A survey conducted by PYMNTS and LendingClub found that more than half of consumers in the income bracket reported the same in December 2022 Social program cutbacks and inflation are squeezing Americans

At the same time, experts say the most vulnerable populations are bearing the brunt of the financial pain in current conditions.

Kyle Waide, president and CEO of the Atlanta Community Food Bank, said in a recent interview that the organization is seeing “40 percent more people today than we did at the beginning of 2022.”

“We are distributing essentially the same volume of food as we did during the height of the pandemic,” he said. “And we know that that increase in demand in the community relates to increased costs associated with inflation, along with the discontinuation of various pandemic-era stimulus programs.”

Waide said he’s referring to the expiration of the temporary expansion to the Child Tax Credit that millions received during the pandemic, as well as discontinuation of the emergency Supplemental Nutrition Assistance Program (SNAP) allocations, among other pandemic-era programs that have begun to unwind.

Anti-hunger advocates have said it’s also been getting tougher for some food banks to meet demand in the face of higher food prices.

“We’re operating on a deficit budget right now,” said Valerie Stone Hawthorne, director of government relations at the North Texas Food Bank. “We are currently working on a budget of $66 million, but we’re only forecasting $45 million in public support.”

“We’ve planned for that to operate in this deficit budget, but it’s not sustainable,” she said, adding, “I don’t see how removing benefits that people need is going to solve the hunger problem.” El Pasoans Fighting Hunger volunteers distribute food at a center in El Paso, Texas. (Lonnie Valencia/El Pasoans Fighting Hunger via AP) More homelessness and food insecurity looks likely

Hawthorne’s comments come amid increased concern over what proposed cuts to non-defense spending on Capitol Hill could mean for efforts to combat food insecurity and homelessness amid a looming battle over the debt limit.

In recent months, House Republicans have ramped up calls for significant fiscal reform and spending cuts to be made as part of a larger deal later this year to act on the debt limit, which caps how much money the Treasury can owe to cover the nation’s bills.

The Treasury first began implementing what it called “extraordinary measures” in January to buy time until the nation reaches the so-called “X Date,” when it could risk a national default.

Among the proposals that have gained in the House GOP conference in recent months includes pitches for tougher work requirements for welfare programs, as well as cap limits for discretionary spending for non-defense programs at dollar levels not seen since 2022 amid a larger push by the party to combat inflation.

“What we’re ultimately talking about is cutting staff benefits with one of the most cruel policies that there is,” Christina Wong, director of public policy and advocacy for the Northwest Harvest food justice group, said of proposed changes to work requirements for SNAP.

“Lots of evidence that shows that work requirements don’t actually get people work because it’s not a lack of willingness to find work, but we’re talking about a population with deep structural barriers to finding employment,” she said.

Carl Gershenson, a lab director at Eviction Lab, said such moves would be “felt immediately,” as housing advocates and officials sound alarm over how federal efforts like the Housing Choice Voucher Program would fare with such cuts.

“That’s families losing access to the support when they need it most and increasing the wait time for people who have already been waiting in some cases up to a decade,” Gershenson said. Staying in your home is becoming more difficult

In a 2022 report, the left-leaning Center on Budget and Policy Priorities found that only about 25 percent of households eligible for federal rental assistance receive it due to “funding limitations” — shutting out more than 16 million households.

“Unlike some other kinds of programs, like Social Security, where everybody’s eligible to help for the housing programs that the federal government has, there’s a lot of people who are eligible who don’t get to help just because it’s discretionary funding program,” Steve Berg, chief policy officer at National Alliance to End Homelessness, said in an interview.

“Congress puts as much money on the table as sort of fits in with the other needs they have that year,” Berg said, adding “people get help get help and the people that don’t get help are homeless.”

House GOP leadership has signaled the conference will move on its own with a debt ceiling bill if Democrats don’t come to the bargaining table, vowing fiscal discipline as the national debt teeters around $31.4 trillion.

But they face a significant challenge in unifying behind a plan that can win the support of their slim majority in the lower chamber as well as the public — recent polling shows Americans agree little on areas to draw down spending.

“The very first thing they need to do is to walk in their constituents’ shoes,” said Barbara Jackson, a retired database administrator based in Atlanta. Lawmakers should “take about six months to have to balance the budget with what [their constituents are] making,” Jackson added.

“The far majority of politicians today are at the upper echelon of the income. So, they can’t relate to the everyday John and Joe,” Jackson said. Homeless men stand by their tents along the street across from Los Angeles City Hall on Oct. 22, 2022. Inflation isn’t falling fast enough to help most Americans

Inflation may be slowing some, but Americans say they aren’t feeling much relief as they contend with higher prices than they saw a year ago.

And some are fearful the worst is yet to come.

“I think we’re moving towards a recession,” Canela said. “At least that’s what it feels like.”

Earlier this month, the Labor Department reported that annual consumer inflation in March reached its lowest point in nearly two years, as the Federal Reserve has continued to hike interest rates in a bid to counter rising prices.

A key driver behind the decline was the slowdown in grocery prices: Annual food costs saw a 1.5 percent drop from February and an overall 5 percent decrease from the high watermark seen in August.

But despite the drop, some can’t help but notice the price stickers are much more north of where they used to be.

Jackson, 74, said she sees “more aspects of high inflation everyday.“

“One of the first things I noticed, probably like millions of others, is the cost of food,” she said. “Not too long ago, you could buy three pounds of onion for a couple of dollars. Now, it’s five bucks.”

While Jackson, who recalled the era of the 2008 financial crisis, said there’s “definitely a difference” between current conditions and a recession, she also said there is still some pressure.

“It’s almost like this is a mist as opposed to a fire and that it’s insidious,” Jackson said. “It’s just everywhere and little by little you begin to notice it.” It’s not technically a recession, but it sure feels like one for many

There is consensus among experts that the country is not currently experiencing a recession, but that doesn’t mean there isn’t a downturn on the horizon.

U.S. central bankers broached the issue of a potential recession following the collapses of two prominent banks last month, minutes of the Federal Open Market Committee meeting show.

“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year,” the minutes stated. SpaceX giant rocket explodes minutes after launch from Texas Yellen calls for better relations with China amid tensions

Officials also expect to hike interest rates one more time this year, which can lead to higher mortgages and credit card payments, as the Fed seeks to make it more expensive to borrow to tackle inflation.

Even so, Fed officials are torn over whether to do so at the bank’s next policy meeting in May.

Sylvan Lane contributed.

Business

Consultations for building set to be scrapped under proposed changes

Published

2 hours ago

March 10, 2025

admin

Consultations for building set to be scrapped under proposed changes

Parts of the planning system could be stripped away by the government in its attempts to speed up house building.

Consulting bodies like Sports England, the Theatres Trust and the Garden History Society will no longer be required for those looking to build under the new plans being considered by ministers.

It is hoped a reduction in statutory consultees will reduce the waiting times for projects.

Angela Rayner, who is both deputy prime minister and housing secretary, said: “We’ve put growth at the heart of our plans as a government, with our Plan for Change milestone to secure 1.5 million homes and unleash Britain’s potential to build.

“We need to reform the system to ensure it is sensible and balanced, and does not create unintended delays – putting a hold on people’s lives and harming our efforts to build the homes people desperately need.

“New developments must still meet our high expectations to create the homes, facilities and infrastructure that communities need.”

Consultees will not be completely excised from the planning process under the changes.

However, instead of it being mandatory to get the opinion of such bodies, their scope will be “narrowed to focus on heritage, safety and environmental protection”, according to the government.

The government says it has identified issues like consultees failing to engage “proactively”, taking too long to provide advice, re-opening issues that have already been dealt with, submitting automatic objections which they later withdraw, and submitting advice for “gold-plated” outcomes that are unrealistic and difficult to achieve.

More than 300 planning applications have been sent up to the secretary of state’s desk in the past three years because of disagreements.

The government has highlighted examples like a project to construct 140 homes in Bradford that was delayed because the application had “not adequately considered the speed of cricket balls”.

As well as reducing the number of consultees that have to be brought in, local authorities will also be told they only need to speak to the bodies if necessary, and decisions should not be held up by more than 21 days.

The government states that “existing open spaces, sports, recreational buildings and land, including playing fields, should not be built on unless an assessment has shown the space to be surplus to requirements or it will be replaced by equivalent or better provision”.

Sport England said its remit in the planning system is to protect playing fields and other spaces for physical activity.

“Britain’s childhood obesity crisis is rising and low physical activity levels cost our economy £7.4bn a year, making it vital we protect the places that local communities can be active,” a spokesperson said.

They added they “look forward” to taking part in the consultation exercise and “arguing the importance of protecting playing fields and places where local people can keep active”.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Sam Richards, CEO of pro-growth campaign group Britain Remade and former Conservative adviser said: “I’m glad the deputy prime minister has taken on board many of the recommendations I made in my review of statutory consultees for the last government.

“It’s a step in the right direction – but there’s still more they can do. For example, they’ve not introduced a ‘use it or lose it’ approach to objections. This would remove the chance of statutory consults to intervene after they miss their deadline.

“There is also some irony in the fact that their decision to remove consultees from the process…has been put out to consultation.”

Business

Drivers ‘confused’ by transition to electric vehicles, ministers warned

Published

2 hours ago

March 10, 2025

admin

Drivers 'confused' by transition to electric vehicles, ministers warned

UK drivers are “confused” by the country’s electric car transition, ministers are being warned.

Although most drivers are not hostile towards electric vehicles (EVs), many are confused about what changes are coming and when, according to new research from the AA.

In a survey of more than 14,000 AA members, 7% thought the government was banning the sale of used petrol and diesel cars.

Around a third thought manual EVs exist, despite them all being automatic.

More than one in five said they would never buy an EV.

The government’s plan for increasing the number of electric vehicles being driven in the UK focuses heavily on increasing the supply of the vehicles.

In 2024, at least 22% of new cars and 10% of new vans sold by each manufacturer in the UK had to be zero-emission, which generally means pure electric.

Each year, those percentages will rise, reaching 80% of new cars and 70% of new vans in 2030.

Manufacturers will face fines of £15,000 per vehicle if electric vehicle sales fall short of 28% of total production this year.

By 2035, all new cars and vans will be required to be fully zero emission, according to the Department for Transport.

Second-hand diesel and petrol cars will still be allowed to be sold after this date, and their fuel will still be available.

There are more EVs – but will people buy them?

In February, 25% of new cars were powered purely by battery and in January, they made up 21% of all new cars registered in the UK.

But despite the growth of electric sales, manufacturers continue to warn that the market will not support the growth required to hit government EV targets, and called for consumer incentives and the extension of tax breaks.

The AA suggested the government’s plan focuses on “supply but does little to encourage demand for EVs”.

It called on ministers to co-ordinate a public awareness campaign alongside the motoring industry which directly targets drivers who doubt the viability of EVs.

“Our message to government is more needs to be done to make EVs accessible for everyone,” said Jakob Pfaudler, AA chief executive.

Which? head of consumer rights Sue Davis said: “When it comes to making sustainable choices such as switching to an electric car, our research shows that people are often held back by high costs, complex choices or uncertainty.

“The government needs to provide the right information on electric vehicles and other sustainable choices so that people have the confidence to switch.”

A Department for Transport spokesperson said: “We’re investing over £2.3bn to help industry and consumers make a supported switch to EVs.

“This includes installing a public charge point every 28 minutes, keeping EV incentives in the company car tax regime to 2030, and extending 100% first-year allowances for zero-emission cars for another year.

“Second-hand EVs are also becoming cheaper than ever, with one in three available under £20,000 and 21 brand new models available for less than £30,000.

“We’re seeing growing consumer confidence as a result.”

US

An A-Z of Donald Trump’s first 50 days in office

Published

2 hours ago

March 10, 2025

admin

An A-Z of Donald Trump's first 50 days in office

In the 50 days since Donald Trump entered the White House, there have been announcements and headlines almost every day.

Here’s an A-Z of the last 50 days under Trump 2.0.

A is for Associated Press, banned from White House events for still using “Gulf of Mexico” rather than Trump’s Gulf of America rebrand. It’s one of a number of changes in media access to government that favours Trump-friendly outlets.

B is for bromance. French President Emmanuel Macron re-affirmed the thigh-patting friendship with Trump when both men leaned in for the tickle in an Oval Office encounter that laid bare the pair’s mutual affection. Macron addressed him as “Dear Donald” in a meeting that had Ukraine as its focus.

C is for the US Constitution, which many see as challenged by Trump 2.0. It divides power equally between the executive, legislative and judicial branches of government. Trump appears to be expanding the executive power of the president in a way that undermines the ‘checks and balances’ structure of government to suit his political will. This is being contested in a number of legal challenges.

D is for DOGE. The Department of Government Efficiency is charged with rooting out “waste, fraud and abuse” in the federal government and has, controversially, enforced closures and slashed thousands of jobs. It has provoked legal challenges.

E is for Elon Musk, the world’s richest man and ‘First Buddy’ in the White House, who is in charge of DOGE. Questions persist around the extent of his unchecked authority and conflict of interest as well as access, through DOGE, to government and personal information.

F is for Fogel. Marc Fogel is a US schoolteacher imprisoned in Russia, released after the Trump administration lobbied the Kremlin, declaring it a “show of good faith from the Russians” and encouraging re ending the Ukraine war.

G is for Greenland, the mineral-rich Arctic territory belonging to Denmark which Donald Trump wants to acquire. Of the self-governing island, he told a recent joint address to Congress: One way or the other, we’re going to get it.” Denmark and the Greenlandic government say it’s not for sale.

H is for how on earth did that happen? The question could apply to a number of things – let’s settle here for the AI video of a re-imagined Gaza as a luxury resort, variously populated by bearded belly dancers, a gold statue of Trump, and the president himself sat sipping cocktails with Israeli PM Benjamin Netanyahu.

Notably, it was shared on social media by President Trump, who has spoken of his wish to “own” the Gaza Strip.

I is for Indian PM Narendra Modi, who met Trump in DC but not before sitting down with Elon Musk and his children. Musk wants access to India for his Starlink internet service and Tesla vehicles. Critics say the meeting raises questions about him using his Trump-adjacent position to benefit his global business.

J is for Justice, as in Department of. Long-serving officials at the DoJ have been removed, creating vacancies in traditionally non-partisan roles that opponents say Trump will fill with people who share his ideology. The president has claimed the DoJ has previously weaponised the law against him. Critics say he will do the same, against his opponents.

K is for Kash Patel, newly appointed director of the Federal Bureau of Investigation (FBI). Controversially, he once amplified Donald Trump’s threats to see retribution against political opponents, saying: “We will go out and find the conspirators not just in government, but in the media.”

L is for a list of other controversial appointments, including:

RFK Jr, head of health and human services, who has promoted conspiracy theories, spread anti-vaccine rhetoric and made other unfounded medical claims.

Pete Hegseth, defence secretary, who faced allegations of alcohol abuse, sexual misconduct, and concerns about his qualifications.

Tulsi Gabbard, director of National Intelligence, who held a 2017 meeting with Syrian dictator Bashar al Assad. Following the invasion of Ukraine, she shared claims that were widely debunked and identified as Russian propaganda.

M is for Moscow. Donald Trump has been on the phone to the Russian capital several times as he resets US relations with Vladimir Putin. He wants Russia back in the G8 and the US is contemplating lifting sanctions as it seeks to improve economic and diplomatic relations.

N is for nervousness created by the on-off tariff saga. President Trump has partially paused 25% tariffs on goods from Canada and Mexico after falls in the stock markets. Tariffs on China and other countries (TBC) remain on the agenda, in spite of trade war fears and economists’ concerns about business uncertainty, low consumer confidence and the effect on prices.

O is for order, as in changing world order. Trump’s strategy challenges the geopolitics that have cemented the United States and its allies and secured peace since the Second World War. His warmth towards traditional adversaries like Russia and China suggests he’s prepared to change the political paradigm and realign a more insular America according to self-interest.

P is for Panama Canal. President Trump says he would consider using military force to seize it from Panama, one of Washington’s closest allies in Latin America. He claims, without evidence, that it’s controlled by China.

Q is for quarterback Patrick Mahomes, of the Kansas City Chiefs. Trump watched him at American football’s ‘Superbowl’ in February, the first sitting president ever to attend. He praised Mahomes’ wife for her vocal support of him but there were no words for the partner of team-mate Travis Kelce. She is, of course, the singer Taylor Swift – no fan of Donald Trump.

R is for Rubio. Marco Rubio, secretary of state, was among cabinet secretaries who rowed with Elon Musk in a meeting over his department cuts. Trump intervened to say he still supported the DOGE mission but department secretaries would be in charge from now on. It’s the first real sign of Trump placing limits on Musk.

S is for special relationship. “We like each other, frankly, and we like each other’s country,” said Trump of UK Prime Minister Sir Keir Starmer. At a White House meeting, the PM delivered an invitation for a state visit from King Charles. The pair talked Ukraine but Starmer will have liked hearing Trump say there was “a very good chance” of a trade deal “where tariffs wouldn’t be necessary”.

T is for Trudeau, as in Justin Trudeau. The departing Canadian prime minister has been a target of Trump as has Canada itself, which Donald Trump wants to make the 51st state of the US. He has insisted on referring to its PM as “Governor” and placed Canada, along with Mexico, at the front of the queue for US tariffs.

U is for USAID. The work of the Agency for International Development has been dismantled. More than 10,000 people have lost their jobs at the agency which spends billions on programmes worldwide, including to ease poverty, treat disease and promote democracy. It is widely viewed as a valuable ‘soft power’ tool for the US but Elon Musk has called it a “criminal organisation” and Donald Trump said it was “run by a bunch of radical lunatics”.

V is for Vance, as in JD Vance. The vice president is viewed as the right-hand man who can articulate Trump policy in a way that Trump himself can’t. His speech to the Munich security conference reflected a reshaping of transatlantic relations, stunning the room by accusing allies of ignoring their own voter concerns about free speech and migration.

Separately, he caused offence in the UK when he said a US mineral deal in Ukraine was a better security guarantee than troops from “some random country that hasn’t fought a war in 30 or 40 years”. He later insisted he hadn’t specified a particular country, adding that British – and French – troops had fought bravely alongside the US.

W is for ‘wokeism’. Ending it is at the heart of the Trump agenda. He has limited diversity, equity and inclusion (DEI) recruitment policies across the federal government and military. It included the firing of the chairman of the Joint Chiefs of Staff, General Charles Q Brown. Previously, defence secretary Pete Hegseth had questioned whether he had been made chairman because he was black.

X is for X, full name X Æ A-Xii. He’s the four-year-old son of Elon Musk who, during an Oval Office news conference, wiped a bogie – or ‘booger’ – on the Resolute desk. Donald Trump, a self-described germaphobe, sent the desk to be cleaned afterwards.

Y is for Yosemite, the national park where DOGE cuts hit in an unexpected way. Some rangers and staff were let go as part of a 1,000-strong reduction in the National Park Service by Elon Musk’s agency, raising questions about what kind of efficiencies Musk is seeking.

Z is for Zelenskyy. An Oval Office news conference with the Ukrainian president ended in extraordinary, unforgettable scenes of shouting and finger-pointing when Trump and his vice president rounded on their guest. Zelenskyy was criticised for not wearing a suit and not expressing thanks during the meeting. Zelenskyy is dealing with a president who called him a dictator and claimed Ukraine started the war. It’s awkward.