Economic Uncertainty Looms Over 2024 Presidential Election
As we gear up for 2024 - a big election year - it's hard not to think of James Carville's famous line from 1992, "It's the economy, stupid." Despite all the talk about Bidenomics, most feel like their wallets were happier during the previous administration… and many are crossing their fingers for a possible second Trump term.
About those money experts on TV – they're all smiles, but we can't help but wonder if they're wearing rose-colored glasses. The numbers are a mixed bag. In November 2023, the Consumer Price Index hit 3.1%, a smidge above the Federal Reserve's 2% target. Core inflation, excluding food and fuel, is sticking around at 4%.
But let's do a little time travel to 2021 – prices are up by more than 10% since November 2022. All this inflation is taking a toll, leading to jaw-dropping credit card debt – over a trillion bucks! People aren't swiping cards for fancy stuff either; it's rent, utilities, and groceries, and they're stuck with sky-high interest rates.
Getting a loan these days? Tough luck. Rejections are on the rise, and folks are tapping into their 401Ks in emergency mode. "Buy now, pay later" schemes are gaining steam too. Home prices are sky-high. Cars are getting repossessed too, thanks to those COVID-19 relief splurges. Oh, and student loan repayments made a comeback in October.
All this financial stress has taken a toll on consumer confidence – it's heading south, as seen in the University of Michigan's sentiment index.
Looking into the crystal ball, 2024 could be a bumpy ride. Expect holiday bills to put a damper on spending, oil prices creeping up, trade hiccups, potential shortages, and a milder recession in the mix. Keep your eyes on the presidential election – it's all about "the economy, stupid" this year.
WHY IS THIS IMPORTANT TO THE TRANSPORTATION LOGISTICS INDUSTRY?
Economic conditions have a direct say in how we open our wallets, which then ripples down to the demand for transportation and logistics services. When those inflation numbers start climbing, brace yourself for higher bills in the trucking business – think fuel, labor, and all those must-haves.
And, let's talk credit – it's a lifeline for most companies in the industry. When credit gets tight, it can often hit the brakes on your plans. Equipment purchases and keeping the gears turning often rely on it.
Additionally, when consumers are feeling less optimistic about their wallets, they tighten the purse strings, and that means less demand for goods and hauling services.
The upcoming presidential election is a wild card. Whatever economic policies come with it could be game-changers for our industry.
OUR HOT TAKE?
Keeping an eye on how the American public is feeling about their wallets is a must. If they're pinching pennies, you've got to adjust your game plan. Supply chain hiccups? Think of them as detours – you've got to know how to navigate them to keep your deliveries on track.
Get a grip on the economic flavor, and you'll be ready to switch lanes when the road ahead gets twisty.
California's reputation for high living costs is well-known, but a recent report from Forbes Advisor highlights other areas across the United States that can put a strain on your wallet.