rate dropped to a three-year low in March, and borrowing saw its biggest rise since 2022. And since consumer spending drives two-thirds of the US economy, those trends are a worry.
⚠️ Part of the pressure is from energy: gasoline has climbed to an average $4.60 a gallon, the highest since 2022, and that’s feeding into a broader US inflation squeeze as the war in Iran sends prices higher.
Why should I care?
For markets: Nice jobs.
US employers added 115,000 new jobs in April, comfortably ahead of the 65,000 that economists were expecting, and marking the first back-to-back monthly gain in almost a year. The one disappointment was that average hourly pay climbed just 3.6%, short of the 3.8% forecast. And that’s not great, with everyday costs rising.
For you personally: Hedge like the best of ’em.
Hedge fund star Ray Dalio sees the US heading into a long stretch of instability, driven by wealth inequality, government debt, deepening political and global divisions, and AI. In his view, the squeeze on US consumers is just an early sign of something bigger.
⚠️ Dalio’s advice: hold 5% to 15% of your portfolio in gold. In past periods of upheaval, traditional currencies have tended to weaken, but gold has tended to rise.