Get the gas and then get out of there. That’s the strategy of motorists at convenience stores these days. No more browsing the aisles for candy, nuts and chips – many people just can’t afford it. So, convenience store sales are down, according to a recent Wall Street Journal article. Here’s what our Elliott Wave Theorist said about the tapped-out consumer a couple of months ago:
The October issue of The Elliott Wave Theorist published a chart showing that starting in 2021, the savings rate in the U.S. plunged as credit-card debt ballooned. Borrowing by individuals is so extreme that many borrowers are having trouble paying the interest and principal on their debts. In 2024, credit-card defaults rose to their second-highest level of the past 20 years. [According to the Financial Times], “Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024.”:
A $46 billion write-off in just nine months! That’s an annual rate of $61 billion — in a positive year for the economy. No wonder credit-card companies set borrowing rates at usurious levels. Rates have to be high to cover losses from other borrowers’ unpaid debts. But wait. Aren’t high rates a big reason people can’t pay? What we have here is a self-reinforcing debt-and-default spiral.
When consumers can no longer borrow, the economy will contract. As the economy contracts, fewer borrowers will be able to pay their debts.
Relatedly, Fortune magazine says the number of people planning a vacation is at a 15-year low. Back then, consumers were still reeling from the Great Recession. Speaking of which, you’ll want to get our take on the prospects for another big economic slowdown. Tap into the analysis of our flagship services now by following this link.
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