A trip to Disneyland costs thousands of dollars per person, Taylor Swift tickets the same, but these attract record crowds. Cruises and hotels and restaurants are full. How would you define an economic boom?
The way in which "booming economy" phrasing is used in conversation, one would imagine that it refers to growth in GDP that has a multiplier effect in the local economy. In practice, it really just means spending is up now, but will deflate as soon as credit is harder to come by.
A lot of vacations, cars and home improvements are funded by home equity loans, not actual disposable income.
Not to mention Disneyland and Taylor Swift concerts will have a significant population of tourists whose spending patterns would be independent of the state of the US economy.
And it's not so much that the stock market is booming, rather the value of the dollar is imploding. Those are equivalent statements but media chose to preset the "number go up" picture. Reality is for every number that "goes up", another number goes down, and the number that goes down is the value of cash.
One metric we can look at to see if "dollar is imploding" is the exchange rate of USD to Euro/Yen/Pound over the past 20 years. None of those exchange rates indicate that the dollar is imploding. Instead they indicate that the dollar is extremely strong.
Similarly we can look at that past 20 years of Euro/Yen/Pound against Argentinian Peso and conclude that it's all fine? Dollar is strong against other currencies only because of the global competitive devaluation.
USD is losing value rapidly. It's amusing to see politicians claiming credit for stocks going up while the food prices are up almost as much, but nobody is responsible for this one. Dollar is down massively and downplaying this fact is only encouraging more of the same.
Real wages are not up for low earners. This is such an obvious math flaw I can't understand how nobody is challenging it. Real wages are adjusted for average inflation based on all consumers. However low earners experience much higher inflation than the average, at least double, and their consumption is vastly different (all of it is housing, food and energy in that order). Many of these low wage earners are periodically homeless or otherwise avoid paying bills to begin with.
Real median wages for full time workers are up a little less than 2.5% since Q4 2019. It could be worse, but it's not really something worth getting excited over.
>Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because their bank accounts were flush with cash
I wonder to what extent credit card issuers factored-in pandemic related stimulus into their risk models. If they really considered cash on-hand as a replacement to verified income the stimulus payments would have completely invalidated their existing models.
That seems to defeat the narrative of "the consumers are struggling due to high interest rates". If they have the cash in their accounts, they shouldn't be the ones largely defaulting.
I think the story is that the COVID stimulus checks meant that people who normally live paycheck to paycheck were for the first time showing a healthy bank balance which increased their credit score just enough to qualify. Once the checks stopped they stated defaulting.
It was an economic boom based on debt. The US faired much better than europe but most likely due to the massive debt we used and then gave to our citizens (and businesses).