Time has an article in their new issue about our likelihood for a recession in the near future.
I haven’t noticed a drop off in activity at the stores lately, but I do get the impression that everyone is a little desperate this year to get just the right toy.
From the article:
This activity has been increasingly fueled by debt. In 1983 household debt equaled 55% of income in the U.S.; now it’s above 114% (and above 136% of after-tax disposable income). The middle class–households earning roughly between $20,000 and $100,000 annually–had a debt-to-income ratio of 141% in 2004, according to New York University (NYU) economist Edward Wolff. And he figures it’s even higher today.
Consumer spending makes up 70% of the economy. It doesn’t take a very small decrease at the spigot for it to trickle down and cause some serious problems in our economy.