With the latest weak jobs report, increasing stock-market volatility and concerns that the Fed may be behind the curve in lowering rates, there has been renewed discussion of the R-word: recession. While the GDP may be in positive territory, middle/working class Americans who have been struggling financially for multiple years now feel as though they have already been experiencing a recession. 

There’s a good reason for this — many Americans are in a personal recession. 

Since the two quarters of negative GDP that we saw at the beginning of 2022, massive government spending (including nearly $2 trillion in yearly real deficits) and consumer spending has kept the GDP in positive growth territory. But the propping up of the economy at face value has come at a real cost for Americans. 

CHICAGO FEDERAL RESERVE BANK PRESIDENT AUSTAN GOOLSBEE: I DON'T SEE A DEPRESSION COMING

For many households, this has caused a personal recession, where their own financial situations have been decimated while trying to keep up with the increased cost of living under the Biden-Harris administration. 

High credit card debt contributes to a record $17.8 trillion in household debt. (CyberGuy.com)

Household debt rose to a record of $17.8 trillion for the second quarter, including records across various categories, like credit card debt, which reached a record $1.14 trillion. Americans are carrying these massive balances at incredibly high interest rates as well, with average credit card APRs above 20%! 

At the same time that debt is going up, individuals’ savings are going down. The most recently updated data shows the personal saving rate down to 3.4% as of June 2024, updated at the end of July. Pre-pandemic in January 2020, the personal saving rate was at 7.2%. 

CLICK HERE FOR MORE FOX NEWS OPINION

This all means that households are saving less and taking on more debt to pay for their living costs. The economy may show growth, but many individuals are experiencing something very different. 

And we saw from the July jobs report that 5.3% of those employed (seasonally adjusted) are holding multiple jobs to stay afloat.  

Average data — which also includes households that are wealthy and those that hold assets which have experienced inflation in values alongside the inflation in the cost of living — can skew numbers and perception. Looking at an average may make it seem like Americans are better off, but the experience is substantially different for people in various wealth and demographic categories. 

As it relates to the broader economy, the first reading of Q2 GDP was 2.8%. We know the government plans to keep up their substantial deficit spending, with deficits-to-GDP running about double the historic average. But on the consumer side, not only are Main Street Americans becoming tapped out financially, the recent turmoil in the stock market could impact consumer spending more widely. 

CLICK HERE TO GET THE FOX NEWS APP

Even though markets have done well, we have seen trillions of dollars in "value" evaporate from the stock market in recent weeks. Should individual investors see their stock portfolios continue to slide, that could create a negative wealth effect, meaning that individuals feel less wealthy and therefore are more cautious about their discretionary spending.  

So, whether the economy turns negative in coming quarters or not, it is clear that the experience of many Americans is as though it already has. This reality should be top of mind as Americans cast their ballots and decide what type of economy they want for the next four years. 

'CLICK HERE TO READ MORE FROM CAROL ROTH