The US economy is shakier than headline numbers show, Eugene Ludwig, a former US Comptroller of the Currency, argued in American Banker, citing his own institute’s figure of 24.9% functional unemployment in July against an official 4.1%. That counts the jobless together with people stuck in part-time work or earning poverty wages, and the wage side is his real concern. The same research says the bottom 60% of earners don’t collectively command enough income for a minimal quality of life, even as GDP rises and top earners pull ahead. Households increasingly cover the gap with BNPL and private credit, Ludwig writes, and neither discloses enough publicly to show how stretched those households are. He expects a downturn closer to the 1989 to 1992 savings-and-loan crisis than to 2007.
