Consumers are either running out of money, having no products to buy, or are just getting sick of higher prices.
Either way, consumer spending dropped dramatically in the third quarter, with the growth rate falling short of expectations by almost 30 percent.
The two percent increase was a dramatic fall from the second quarter, which showed a 6.7 percent growth.
Bad News for Biden
There are a lot of factors that go into the dramatic swing, none of them good for the Biden administration.
First and foremost is the supply chain shortage.
If you have gone to any store or even ordered products online, you already know there are significant shortages of highly used products.
If the products are not available, people cannot spend money.
One area where this is really taking a toll is in the automotive industry.
Secondly, the higher prices of products have also had people slow down purchasing on some luxury items.
Thirdly, all that “free” money the government was handing out has suddenly dried up, so people are tightening up their purse strings.
The White House will tell you all of this is good, but common sense says that the bubble is about to burst, and a lot of people are going to get splashed.
Now, Florida has stepped up to open its ports for all the cargo ships anchored off the California coast, so we will see how much of an impact that has in the next quarter.
However, keep in mind, vaccine mandates are all kicking in for federal jobs, many first responders, and the military.
Additionally, once the new OSHA rules go into effect, those mandates will start to impact the private sector, which could add significantly to unemployment numbers, especially for minorities, who by far are the largest demographic to resist the vaccine.
The timing of this could be an absolute disaster for Biden and Democrats, as the worst of this will be hitting just as the 2022 campaign season really starts to heat up.
Source: Fox Business