Almost one-third of Americans say they can’t afford a vacation

Almost one-third of Americans say they can’t afford a vacation

While more than a few GDP forecasts for the current quarter were lifted by the July Retail Sales report that came in ahead of expectations, we’re seeing other signs indicating that not all is well in consumer land. Odds are consumers feeling the pinch of our Middle-class Squeeze investing theme are having to choose what and where they can spend their disposable income dollars.

This is nothing new for some, but it does explain consumer spending strength across certain categories, while others, such as appliances, clothing, sporting goods and vacations, have been declined year over year. The larger issue is in order to make ends meet or to have funds to meet a portion of their spending needs consumers continue to take on more debt. The newest Federal Reserve Bank of New York’s Household Debt and Credit Report shows that exiting the June quarter consumer household debt was  1.2 trillion higher than the peak of $12.68 trillion in 2008.

That’s bound to be a headwind on consumer spending as more discretionary dollars are eaten up by debt servicing. This doesn’t exactly bode well for the year-end holiday shopping…

Americans, crippled by debt and seeing signs of a slowing economy, are sitting out on pricey vacations and everyday leisure activities.

A new Bankrate survey found 42% of Americans decided not to take a vacation over the past year because of the cost. Nearly a third said they can afford a vacation less now than they could have five years ago, though 26% said they can afford to do so more now. More than two-thirds of U.S. adults opted out of a recreational activity due to the cost at some point in the past year, the study found.

You can’t blame them. Trade tensions have economists projecting the likelihood of a recession in the next 12 months at 35%. U.S. student debt is over $1.5 trillion. Almost 40% of Americans think the economy is “not so good” or “poor.”

Source: Americans Say They Can’t Afford a Vacation – Bloomberg

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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