17 Aug Wait a minute… I thought ppl’r’ doin’ great…?
Uhhh… wait a minute. I thought people are doin’ great. So why are they using pawn shops to get by? It wasn’t so long ago that we were given a pretty rosy picture:
“Most Americans are significantly better off financially now than they were before the pandemic began, new bank-account data shows, but there are signs that low-income families are beginning to fall behind. Following surprisingly strong retail sales, consumer expectations and hiring numbers, new savings data through December 2021 from the JPMorgan Chase Institute points to a rapidly thawing economy, one that could shift into even higher gear as the omicron-fueled covid-19 wave subsides and states continue to ease some covid restrictions. Americans are sitting on $2.6 trillion in extra savings, a separate Post analysis shows, and signs abound that they are opening up their wallets on long-delayed spending on travel, dining and other experiences that have been on hold since lockdowns swept the country almost two years ago.”
–https://www.washingtonpost.com/business/2022/02/23/savings-bank-accounts-covid/ published February 23, 2022
I remember many talking heads on the TV squawking that Americans had plenty o’cash in savings. I always wondered who TF they were referring to…? Perhaps it’s the people who feel like inflation is no big deal because they have money to burn:
“The optimism from retail real estate owners comes amid warning signs from across the industry. In recent weeks, retailers including Walmart, Target, Best Buy, Gap and Adidas slashed their sales or profit outlooks as consumers squeezed by higher gas and grocery bills rein in spending on other items. At the same time, though, luxury retailers including Birkin bag maker Hermes and Louis Vuitton parent LVMH say profits are strong and sales are growing as higher-income consumers continue to splurge on pricey fashion and accessories.
At its malls, Simon Property also said it’s noticing a split in behavior. Consumers who shop at value-oriented retailers are more likely to be pulling back, Simon said, as are younger shoppers who don’t earn as much money. Among those seeing softening sales are the company’s teen and fast-fashion retailers Aeropostale and Forever 21, as well as its J.C. Penney department store chain, he said.”
–https://www.cnbc.com/2022/08/02/mall-owners-retailers-still-opening-stores-despite-recession-fears.html (emphasis mine)
Maybe this is an intersection of agreement: people with a lot of money are doin’ just fine and those without it are struggling hard. Other than the old yarn, “The rich get richer and the poor get poorer,” what does this tell us? Possibly that what we see is a K shaped recovery.
Although I would argue it’s not really a K shaped recovery, but more of a K shaped economy.
“The surge in gas prices, groceries, and bills has even brought new faces to the shop. Donaldson says business is loaning out more than what is getting in.
‘It has brought in more people, but it is getting to the point where we are loaning out way more of what we are getting in,’ Donaldson said.
The increase in customers is significant. Just two years ago, when Covid hit, Donaldson says pawns were around seventy thousand, now it is one-hundred-twenty thousand.
‘We almost double the amount of money that we loan out in two years,’ Donaldson said.”
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