Everything is not like a Hollywood movie in America. The economy of the United States is beginning to show stress from the enormous debt carried by the average citizen. That pressure was seen this week as the American stock markets experienced huge losses which drove investors values down around 3% in a single day.
Warning signs are showing up in every sector of the U.S. economy which makes the worries of a new recession, or even depression, more believable. Americans now have nearly $10 trillion dollars in mortgage debt alone, that’s almost $150,000 per household. On top of that debt, 43 million Americans owe over $1.5 trillion dollars in student loan debt. The average American owes over $4,000 dollars in credit card debt and another $10,000 in auto loans. Combined debt in the U.S. now exceeds 14 trillion dollars.
The results are predictable, bankruptcy filings have increased by 3% this year to the highest level in five years. Loan delinquencies are also increasing, almost quarter percent increase in the first quarter of 2019, to the highest level in seven years and as high as the 2001 dot com recession levels.
Another impact of the massive debt is to the average workers employment. So far in 2019, over 43,000 workers have lost jobs as their small businesses go bankrupt and close their doors. That’s more in 2019 than total job losses from bankrupt businesses in all of 2018. Small businesses aren’t alone though, as global businesses, especially in banking and finance are cutting costs starting with employees. The five largest banks in the U.S. have already furloughed 6% of their staff in 2019.
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