1: Marriage rates in the US have declined dramatically since 1990. People are delaying marriage because a) they can’t afford all the things that come with marriage (e.g. a house…see #4 below) and b) their careers require a greater investment in post-secondary education. Long-gone are the days where you could get a lifetime job and great pension with a high-school diploma.
Some would also argue marriage rates have declined because the ‘contract’ disproportionately punishes men when broken.
Young adults are also backing away from the traditional path because the world is in disarray (conflict, environment).
2: Many economists are forecasting inflation will fall throughout 2023. However, the chart below shows the median inflationary experience drags on for much longer than economists currently predict with a wide range of outcomes. We might see inflation rates starting to improve, but it could take a long time to reach the Fed’s 2% target.
3: While the stock market rallied on Friday SPY 0.00%↑ QQQ 0.00%↑ the global market for government bonds is showing signs of stress. Central banks around the world are tightening policy (by raising rates and QT) so this is to be expected. However, they are playing with matches near a tinderbox that could go up in flames any time.
4: Over the few months alone, housing affordability has plummeted. (The rising cost of borrowing at a time when prices are already high will do that.) Housing is now a luxury good and the American dream is dead.
Home ownership is the bedrock of the North American middle class. It creates stability, wealth and gives citizens a stake in the game. While some other countries have much lower rates of home ownership and do just fine, they also have much larger social safety nets than America. The stability of home ownership in America helps counter the lack of stability in other areas.