Q2 2024 Hive Research Update

The first Hive Research Institute analysis highlights a steady decrease in core inflation, providing a positive outlook for economic stability. While consumer incomes are rising, indicating improved risk management, there is still significant potential for spending capacity despite current financial challenges. Overall, the report suggests resilience in the consumer sector as the economy navigates through its complexities.

KEY POINTS: 

• Rising Debt Levels: The debt-to-GDP ratio is increasing, with both political parties signaling continued government spending, leading to concerns about long-term economic sustainability.

• Housing Affordability Crisis: U.S. housing affordability is at its worst level in over 25 years, exacerbating financial pressures on consumers amid rising interest payments that now exceed defense spending.

• Inflation and Employment Trends: Core inflation is decreasing, but unemployment is slowly rising, indicating a potential slowdown in hiring and job openings.

• Consumer Financial Distress: Post-COVID stimulus funds have been depleted, leaving many consumers with negative bank account balances and increasing credit card delinquencies, which have surpassed 10%.

• Overall Consumer Risk Profile: Despite a decline in loan sizes, median incomes are rising, suggesting some risk management improvements. However, the average consumer remains distressed due to rising expenses, particularly in grocery spending.

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