Keep that in mind, and take these recent headlines:
1). “Why Americans are Miserable and Broke”
2). “The Death of the American Consumer”
3). “Median wealth of U.S. households lowest since 1969”
4). “Strike Three! The American Consumer Is Out”
5). “More Americans Think Economy Will Never Recover”
6). “Broke Consumers Hit Credit Cards for a Few Last Pennies”
Most of these headlines are accurate. American households are in terrible shape. Incomes are down, confidence is down, wealth is down, and unless you have a good degree from a good school, the jobs market is a joke.
However, not despite that gloom, but because of it, I’m optimistic about the U.S. consumer.
There’s more to it than hope. Household debt has plunged. Combined with low interest rates, households will pay a staggering half a trillion dollars less in debt payments this year than they did in 2007. That offers flexibility and opportunity in household budgets for the first time in years. After declining by nearly four million, the population of Americans aged 30 to 44 — a heavy-spending bunch — is about to start rising again for the first time in a decade. Wages have been cut so low that now it’s backfiring on businesses. Take this recent story from The New York Times about Wal-Mart Stores, Inc. (NYSE:WMT) :
Wal-Mart Stores, Inc. (NYSE:WMT), the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Wal-Mart Stores, Inc. (NYSE:WMT) managers show the company grappling with low customer confidence in its produce and poor quality. “Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”
You can’t run an economy like this indefinitely. It eventually balances itself out. As Williams might say, something happens to keep bad news from going on forever.
I’m an optimist. As I’ve explained, that doesn’t mean I think bad things won’t happen. It means that over long periods of time, the odds are in the favor of those who think things will generally get better. When something like “the death of the American consumer” becomes mainstream, the odds of things getting better go up. Things change fast. And we’re due for a change.
The article Learning from the Past, and the Next Big Trend originally appeared on Fool.com and is written by Morgan Housel.
Fool contributor Morgan Housel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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