Doesn’t seem like people are hurting financially right now

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Airline prices are higher than ever, yet almost every flight is near or at capacity.

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I thought a bunch of airlines reduced the number of flights. So yeah, the ones left are full but its due to fewer number of flights

Usually takes a quarter or two for rate hikes to work. There’s the true higher cost of money and borrowing and then there’s the mental part too. Mental part usually takes an oh shite moment for people to realize they need to tighten up.

Also, you are now seeing the largest wealth gap in history. There will be no middle class when it’s all said and done.

No link, just an old grey hair banker that’s seen a lot through the years.

2 years ago the lower class was probably shrinking into the middle class. But it was all propped up by government spending and programs during Covid. Now that the tide is rolling out those people will all show they’re playing with their pants down.

Average care note of over $700 a month now too plus housing costs. Shits about to hit the fan.

Nope. Kind of dead on there

Some of those are inter-related.

I read that the US airline industry as a whole let go 10,000 pilots during pandemic, resulting in less flights. Supply of airline seats is down versus 2019, as it contracted during pandemic and airlines are slow to add capacity (as they are facing air traffic controllers, operations staff turnover, etc.), yet demand is strong (but on a smaller supply).

If people cannot afford airline tickets, you can bet they are driving. Fuel volume is not quite back to Aug 2019 levels but real close and suspect summer 2022 will get there.

People got a taste of virtual working and now in some households 2 working parents are working from home and/or people can work from anywhere. Sweet interest rates of recent years, particularly during pandemic and historically speaking, keeping that demand high. Commensurate raw materials up (some just because they could, eg, plumbing pipe). Demand destruction starting now in housing with interest rates on rise.

I don't think this economy is one we have seen before. It is far more micro (and some unique) events happening, yet the Fed's tools to mitigate inflation are blunt and broad. The case studies for future, more efficient treatment of inflation in a never seen before economy, is in development.

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All of that said, savings rates are plummeting and consumer sentiment is worsening.

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I think a bit of this is that a lot of people have a bit of hubris about their job security given what we’ve seen in the labor markets over the last 24-48 months.

Based on what I’m hearing from a few CEOs I work with, labor markets are starting to soften ever so slightly. We’ve gotten some in-office employees hired in the last month that we had trouble getting anyone to even get interview for 3 months ago.

People are going to be shocked at how quick the tide will turn on them.

Consumer debt is on the rise, and most people book flights ahead of time like 2-4 months so they paid a cheaper price. Take that with people not having to pay rent, and student loans they have an inflated since of what they can afford. Now they all think student loan debt will be eliminated so why not blow more money? And all back rent will be forgiven until they finally get their eviction notice and won’t be able to afford anything because they blew all that money

I know it’s a bit of a reach but I have a theory on why it appears spending has continued despite all of the bad news.

I think that marketing is currently too powerful for the average person. Have we ever had a time in history where people were this inundated with advertisements? I think it has entirely hooked into our desire to “keep up with the jones’” and people are just going to spend until they drive off the cliff.

Mix that with consumer debt being at an all time high, savings being at an all time low, car/utilities/gas payments skyrocketing, certain industries pulling back (mortgage, real estate, automotive), and bs loans in the auto/solar industry should be a cause for concern.
No clue where we are headed but it will be somewhere interesting.

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No clue where we are headed but it will be somewhere interesting.

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I just wish the train wreck would begin already.