USA Economy COLLAPSING - Goldman: "Soft Landing Dead," 70-Year Record LOW, 1 in 4 Skip Meals

本站添加: 2026-05-28

[00:00:00]There are moments in economics where the professional forecasts, the statistical data, and the lived experience of ordinary people all converge on the same conclusion at the same time. Those moments tend to be rare, but they also are the moments that precede the worst outcomes. This week, three separate reports from three separate institutions measuring three separate dimensions of the American economy all arrived at the same place. Goldman Sachs declared that the Iran war has killed a soft landing scenario for the United States and warned of a possible negative growth shock. The University of Michigan's consumer sentiment index fell to its lowest level in the survey's entire 70-year history, lower than 2008, lower than CO, lower than any point ever recorded. And CNBC published a report showing that 37% of American adults cannot cover a $400 emergency expense, that credit card debt has hit a record $1.21 trillion, and that one in four Americans is now skipping meals to make their monthly debt payments. The economists see it coming. The data confirms that it is arriving and millions of people are sadly already living inside it. My name is L. I have a PhD in computer science and I use data analysis to spot patterns in geopolitics and economics and I want to walk through these three reports carefully because together they tell a story that is more complete and more troubling than any of them tells alone. Let's start with Goldman Sachs. Yan Hatsuse the bank's chief economist and one of the most respected forecasters on Wall Street published a note this week stating that the Iran war has destroyed what he called the Goldilock scenario. the expectation that the US economy would achieve a soft landing with gradually declining inflation, steady employment, and eventual rate cuts. That scenario, Hatsio wrote, is now dead. In its place is a range of outcomes that includes what Goldman describes as a negative growth shock, an economic contraction driven by the simultaneous impact of elevated energy prices, sticky inflation, rising interest rates, and collapsing consumer confidence. Goldman has not formally called a recession, but the language negative growth shock is as close as a major investment bank gets to saying the word without saying the word.

[00:02:24]The mechanism Hatsu identified is the one this channel has been documenting for months now. The Iran war sent oil prices up roughly 80%. Higher oil prices fed directly into consumer inflation, which hit 3.8% in April. Higher inflation pushed bond yields to levels not seen since 2007. The 30-year Treasury yield crossed 5.2% this month.

[00:02:47]Higher yields mean the government pays more to borrow, which widens the deficit further, which requires more borrowing at the new higher rates. And simultaneously, higher energy and food prices compress household purchasing power, meaning consumers spend more on essentials and less on everything else, which slows the broader economy.

[00:03:07]Goldman's note describes this as a negative feedback loop between energy costs, inflation expectations, and consumer spending. This channel described the same mechanism 3 weeks ago. Goldman just put their name on it as well. If you've been following this channel's coverage of the US economy, this is the institutional confirmation part. The data we have been tracking has now been endorsed by one of the most influential financial institutions on the planet. Next up, the University of Michigan's consumer sentiment index provides the statistical confirmation, too. The May reading came in at the lowest level since the survey began in the 1950s. Not the lowest in a decade, not the lowest since the great financial crisis, the lowest ever recorded in over 70 years of continuous measurement.

[00:03:54]Consumer expectations for inflation over the next 12 months surged to 7.3%, the highest since 1981 when Paul Vulkar was raising interest rates to 20% to break the last great inflationary spiral. Long-term inflation expectations, the 5 to 10year outlook, rose to 4.6%, which is the highest since 1993. These numbers matter a huge deal because consumer expectations are self-fulfilling prophecies. When people expect prices to rise, they demand higher wages. Companies raise prices to cover those wages and the inflation becomes embedded in the economic structure. The Federal Reserve watches these numbers very closely, more closely than any other indicator. And right now, those numbers are telling the Fed that the public has lost confidence in the institution's ability to control inflation at the worst possible moment with a new Fed chair inheriting the most divided FOMC in 30 years. If you're trying to understand how to read through headline economic data and see what the structural indicators underneath actually show, my book, Awake, the Practice of Critical Thinking in an Age of Soft Lines, is available as an ebook and audiobook. Subscribers get 10% off and you can grab the first chapter for free in the description links below. And then there is the human layer, the most important one, because behind every data point in a consumer sentiment survey is a legitimate person making decisions about what they can and cannot afford.

[00:05:20]This week, CNBC reported this week that 37% of American adults, roughly 95 million people, say they could not cover an unexpected $400 expense without borrowing money or selling something they own. Credit card debt has reached a record $1.21 trillion. The average credit card interest rate is 22.76%.

[00:05:44]Meaning a household carrying $10,000 in revolving credit card debt is paying over $2,200 per year in interest alone before touching the principal. One in four Americans told researchers they have skipped meals in order to make their monthly debt payments. Medical debt remains the leading cause of personal bankruptcy. And the households most exposed to these pressures are the same ones most affected by rising fuel prices, rising food prices, and the tariff-driven increases in the cost of imported goods that the administration's own trade policies have imposed. The connection between all of these three layers is not abstract. It is very mechanical. The war drives oil higher.

[00:06:27]Oil drives inflation higher. Inflation drives interest rates higher. Higher rates make credit card debt more expensive. More expensive debt forces households to cut spending. Cutting spending on food, like skipping meals, is the last stage before default. And default, multiplied across millions of households simultaneously, is what turns a slowdown into a recession and a recession into a serious crisis. Goldman sees the macro picture. Michigan measures the sentiment. CNBC documents what happens when sentiment turns into behavior. And the behavior, skipping meals, draining savings, carrying record debt at record interest rates, is the human cost of every policy decision this channel has been tracking since February. Now, I want to be very clear about something. This is not a video celebrating American decline. There is nothing satisfying about people skipping meals. There is nothing entertaining about a family choosing between insulin and electricity, between a credit card payment and a grocery run. These are real people living inside the consequences of decisions they did not make, a war they did not vote for, tariffs they did not choose, an immigration crackdown that reduced tax revenue they were never told about, and an interest rate environment driven by a bond market responding to a geopolitical crisis that most Americans can neither influence nor escape. The data is the data, but the data represents human beings. And those human beings deserve better than being governed by social media posts and policy by impulse. While the economists at Goldman Sachs write notes about negative growth shocks, and the sentiment index hits numbers it has never hit before in 70 years of asking the question. I don't personally think that the Michigan consumer sentiment index will recover above its 2024 average before the end of this year.

[00:08:18]Credit card delinquency rates, which have already been rising, will accelerate through this summer as fuel costs remain elevated, and the cumulative effect of three months of war-driven inflation works through household budgets. Goldman's negative growth shock scenario will move from risk assessment to baseline forecast if oil stays above $100 through the third quarter of this year. And the human costs, the skipped meals, the medical debt, the $400 emergencies that 95 million adults cannot cover will probably continue to compound in ways that no headline unemployment number can capture because the headline was never designed to measure suffering. It was instead designed to measure participation. And participation in an economy that charges you 22.76% interest to survive is not exactly the same thing as thriving inside it. But while the US economy deteriorates across every measurable dimension, Moody's chief economist has been tracking a specific recession indicator that has been flashing since January. I made a video on this vicious cycle index, why he says the economy has seven fingers left on the edge of a cliff, and what happens when the next two slip. That's the one that I would watch next. Thanks so much for watching this one. Subscribe and I'll see youall on the next