When income growth declines, there are two possible outcomes: either spending growth reduces or individuals start dipping into their savings or increasing borrowing. In such situations, credit card balances tend to rise as seen with the record $1.1 trillion in credit card debt reported by the New York Fed in the fourth quarter of 2023.
What's going on with consumers? This is one of the trickiest puzzles of this weird economic moment we're in. We've covered a version of this before under the term "
vibecession," but it's safe to say, the struggle is in fact real. It is not just in our heads. Sure, sure, some data is looking great. But not all of it.
What's interesting, is exactly
why the bad feels so much worse than the good feels good. Today on the show, we look into a few theories on why feelings are just not matching up with data. We'll break down some numbers and how to think about them. Then we look at grocery prices in particular, and an effort to combat unfair pricing using a mostly forgotten 1930's law. Will it actually help?
Today's episode is adapted from episodes for Planet Money's daily show,
The Indicator. Subscribe
here.
Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.Learn more about sponsor message choices:
podcastchoices.com/adchoicesNPR Privacy Policy