Low-income Americans are near recession, putting rest of economy at risk

[libertybele]

The concern is layoffs due to AI.  The writing has been on the wall. Some proclaimed that AI was going to create new jobs --- I don't see that is happening.

Low-income Americans are near recession, putting rest of economy at risk

Mohamed El-Erian, chief economic adviser at Allianz, is warning that lower-income Americans are under "significant pressure" and that a halt to their spending would weigh on the economy as a whole.

"This is not an isolated concern if the lower household incomes stop spending, not because they don't want to spend, but they're not able to spend. That will contaminate upwards for the economy as a whole," El-Erian said in an interview during Yahoo Finance's annual Invest conference.

The economy has become increasingly bifurcated as higher-income consumers continue to spend while lower-income households have been forced to pull back. El-Erian said that lower-income consumers are "near recession" at a time when inflation is stuck at 3%, layoffs are surging, AI is changing the workforce, and debt levels are high as credit cards have been maxed out.

https://www.yahoo.com/finance/news/el-erian-low-income-americans-are-near-recession-putting-rest-of-economy-at-risk-124342677.html

[Bigun]

I'm sorry if this offends anyone but I generally don't pay much attention to the prognostications of people named Mohamed.

[libertybele]

I'm sorry if this offends anyone but I generally don't pay much attention to the prognostications of people named Mohamed.

Thank you.   Obviously I need to pay closer attention.

[Fishrrman]

Bigun wrote:
"I'm sorry if this offends anyone but I generally don't pay much attention to the prognostications of people named Mohamed."

No apology needed.
That's the first thing I thought when I saw that name, as well.

[GtHawk]

So does this mean credit card companies are going to stop giving low income Americans…and non Americans, more credit cards?

[Wingnut]

So does this mean credit card companies are going to stop giving low income Americans…and non Americans, more credit cards?

The 36%APR is a real bargain these days.

[GtHawk]

The 36%APR is a real bargain these days.

I don’t know nuthin about that, haven't had a credit card close to twenty years, not bought on credit either…….which is actually pretty easy when you don’t have a credit score   Who knew there were benefits to the Obama economy.

[berdie]

I don’t know nuthin about that, haven't had a credit card close to twenty years, not bought on credit either…….which is actually pretty easy when you don’t have a credit score   Who knew there were benefits to the Obama economy.

Things may have changed, but back in the 70s my in-laws were strictly cash and carry. They had no credit score. They needed to finance  something (can't remember what) and hubby and I had to sign for them. That was a switch from the normal.    Like I said...things may have changed, but I keep a credit card that I pay off the end off each month just to keep a credit score.