As President Donald Trump's trade wars shake confidence in the American economy, the Wall Street Journal is reporting that the economy's top driver may not have much more juice.
As noted by the Journal, consumer spending has kept the American economy afloat for the past several years through supply-chain disruptions, inflation and interest rate hikes.
But now, writes the Journal, there's reason to believe that American consumers and their credit cards "might be maxed out."
"Americans’ inflation-adjusted debt burdens are starting to grow further beyond prepandemic levels on a per-household basis," the paper writes. "As of the fourth quarter of 2024, the average household’s credit-card debt surpassed $10,000, adjusted for inflation, for the first time since 2009, according to data compiled by consumer-finance website WalletHub."
ALSO READ: ‘This is just eugenicism’: RFK skewered as he blames diet and exercise for measles deaths
Additionally, the Journal writes that analysts are worried about the mass federal government layoffs being overseen by Elon Musk that could have downstream effects on the broader American economy.
"Lenders often say that the biggest input on their credit modeling is employment," the paper writes. "Whatever is happening with economic growth, or stock prices, so long as people are working they are likely to keep up with their payments. So lenders could be sensitive to job losses, even if they are concentrated among federal workers or people who work in sectors that rely on imported goods."
