WTF Chart of the Day ("The U.S. Consumer Is In Great Shape" Edition) - 11.18.2022 consumer looks good cartoon

many on Wall Street would have you believe the U.S. consumer is "hanging in there" and "in fine shape."

That's horse crap. Let's dispose of that nonsense right now.

Below is your "WTF Chart of the Day." As you can see, over the past 50 years the cost of public tuition is up +1,759%. Meanwhile, the salary of your average, hardworking American is up just +596%.

Inflation: ✔

WTF Chart of the Day ("The U.S. Consumer Is In Great Shape" Edition) - college tuition

But wait! there's more...

We've been highlighting the big challenges facing U.S. consumers saddled with sky-high inflation for some time. Unfortunately, it extends beyond that. Here are some disconcerting developments and an additional chart for you to share this with any fool telling you the U.S. consumer is doing fine.

  • Consumer Credit Card Balances are at 20-year highs
  • The cost of that debt is at multi-decade highs
  • The Consumer Savings Rate is at multi-decade lows
  • Meanwhile, there's a 22-month streak of negative income growth

Did we mention people are now "microfinancing" everything from $12 vodka cranberries to $10 chicken sandwiches?

No, the U.S. consumer is not well. Get your head checked if you disagree.

WTF Chart of the Day ("The U.S. Consumer Is In Great Shape" Edition) - credit

If that weren't bad enough...

These massive, structural sea changes (from college debt costs to sky high inflation) have ripple effects that impact the worldviews of different generations. Renowned demographer and Hedgeye analyst Neil Howe coined the term "millennial," so he's very familiar with the ebb and flow of attitudes amongst generations.

WTF Chart of the Day ("The U.S. Consumer Is In Great Shape" Edition) - z inflation cartoon Hedgeye

Neil wrote an excellent Demography Unplugged piece recently entitled, "Late-Wave Millennials Are Embarrassed by Their Finances." In it, Neil recounts how, among other things, recessions (of the GFC/pandemic/etc) and a regime shift in the cost of capital (i.e. multi-decade highs in inflation) are impacting "late-wave millennials."

Here's an excerpt:

Back when Boomers were reaching their early 20s, the emerging "Love" and "Protest" generation liked to flaunt their open hostility to the materialism of older Americans. The Beatles swore that money "can't buy me love." The Grass Roots yearned to "live for today." And Kenny Loggins, in his most famous line, kept insisting that "even though we ain't got money," life would be wonderful. Kids bragged about how little they cared about degrees or salaries or promotions.

That was then.

Today, the youth mood has changed--to put it mildly. In contrast to many of their parents back in the day, late-wave Millennials are obsessed with credentials and all the other metrics of material advancement. And when they feel these not advancing fast enough, they are ashamed to reveal their sense of inadequacy to anybody else.

According to a recent Intuit survey, late-wave Millennials are highly embarrassed by their finances. When given a list of "taboo topics," they are more comfortable discussing relationship drama (32%), politics (30%), and sex (29%) than their salary (25%) and credit card debt (23%). Moreover, 54% have lied about their salary (at an age when, presumably, salary shouldn't be such a big deal), compared to 48% of all adults. 61% of 18- to 25-year-olds report spending less time with friends due to financial problems. 

Next time someone tells you, "The U.S. Consumer is in great shape" tell them to get their head out of their arse.

WTF Chart of the Day ("The U.S. Consumer Is In Great Shape" Edition) - Feb28