by Rick Ackerman, Rick Ackerman.com:
Here’s a perplexing new twist in the story of America’s supposed recovery from The Great Recession. While auto manufacturers can barely keep up with demand, sales at Wal-Mart, Macy’s and some other big retailers have gone flat. What’s going on here? The easy explanation is that auto showrooms attract a different class of shopper, one with more discretionary income. Our take, however, is that more than a few Wal-Mart shoppers who have cut back on non-essential purchases are in fact driving shiny new SUVs.
While this might seem paradoxical, there’s a simple explanation – namely, that even households that don’t have two nickels to rub together at the end of the month can easily qualify for a $40,000, five-year car loan. With interest rates as low as they are, especially for big-ticket items purchased on credit, the buy-now- pay-later engine of the U.S. economy is able to thrive even with real incomes stagnant and new employment coming mainly from minimum-wage jobs.
Please follow SGT Report on Twitter & help share the message.