The U.S. economy is facing a major red flag: the majority of Americans simply can’t afford to spend. George Seay, founder & chairman of Annandale Capital, joined TheStreet to discuss this concerning trend and its potential impact on the economy.
Related: Macy’s sounds yet another alarm on consumer spending
Full Video Transcript Below:
GEORGE SEAY: I think we should be concerned about the American consumer. There was an article in the Wall Street Journal last week that said that roughly 50% of consumer spending is the highest 10% of income earners, people who earn over $250,000 per year and up. And that’s unhealthy for our economy. It’s just not good. So I’m really concerned about the fact that most spending is at the top of the pyramid for the American consumer and most normal people middle class, lower middle class, lower class. They don’t have any excess money to spend on anything right now. And I think that’s a real vulnerable vulnerability risk for the economy first and for our countries more importantly second. It’s not a healthy state of affairs. And I also would add to that that the the the first year you buy your home has gone up from an average age of 26, 27 to 34. And that’s really sad.
I mean, one of the great things about being in this country is the ability to own your own home, and the fact that people can’t afford it until they’re much older right now is very unhealthy. And that’s due to interest rates going up dramatically and due to the price of single family homes going up dramatically since the great recession, because we didn’t build enough homes. So hopefully we’ll have a much higher supply of homes coming on the market in the next 5 to 10 years, so more people can afford to own their first home. That’s something we should all cheer for. And right now, it’s it’s it’s really kind of an ominous, depressing thing about the economy. So we’ve got a lot of things to worry about right now. But the good news is we live here. This is still the best country in the world. You know, the the joke that Winston Churchill made back in the day is the United States is the best house in a bad neighborhood. The world is really not in great shape right now, but we’re about the best actor is. So we should all celebrate that. But there’s there’s many things to worry about and be cautious about right now as well.
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