President Donald Trump's Commerce Secretary, Howard Lutnick, vowed months ago that the economy would take off at any minute thanks to the administration's policies — but Heather Long, chief economist at Navy Federal Credit Union, told MS NOW's Antonia Hylton on Monday that the economy is showing warning signs of just the opposite.
"Heather, help me understand what's driving this economic anxiety for so many Americans, if the economy is ostensibly, allegedly doing well?" said Hylton.
"It's a very weird time in the economy," said Long. "Look, what's really going on here is a jobless boom. So yes, the overall economy is growing really well, largely due to the AI boom that's going on and due to really wealthy consumers in this K-shaped economy, where wealthy Americans continue to spend and spend and spend and a lot of middle-income and lower-income Americans are pulling back or treading water right now. And so, at the same time, this economy has created almost no jobs since April. And that's what's really making people nervous. Not only do they see prices rising for some key food items and electricity, among other things, they can see that it's almost impossible to get a job right now."
"Heather, people are feeling so squeezed," said Hylton. "Why did we see these numbers? The level of consumer spending around the holidays. Is that a Costco Christmas? What do you make of that?"
"Yeah, that's what I've been calling it: Costco Christmas," said Long. "We can see in our credit card data and Navy Federal, in the 15 million members that we have in our credit union. Just this amazing shift this year of people rushing to these value and warehouse-type stores. You know, we're talking 10 percent increase in spending at Costco, Amazon, Walmart, and Sam's Club as people are really trying to make every dollar count, as they're having to spend more on things like meat. And, you know, they don't have a lot left for those discretionary purchases that they would really like to make."
"So it's been a fascinating trend to watch this holiday season," Long added. "You know, people are having to spend more money on the basics in the middle class, and you can really see them pulling back on things like travel, eating out, or not spending as much on restaurants, frankly."
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