If there was a Merry Christmas for most people, it looks as if there might be a wicked financial hangover for plenty of others, including the country's treasury.

It sounds as if retail sales were up a bit. How much of that was inflation-related and how much of it was optimism spending, I really don't know. 

I'm not an economist - I only play one here at HotAir.

However you look at it, a buttload of cha-ching changed hands.

...Shoppers spent between $979.5 billion and $989 billion last month and in December, with retail sales up 2.5% to 3.5% from a year ago, according to an estimate from the National Retail Federation, the nation's biggest retail trade group. 

Retailers are now looking to encourage more of the same in wrapping up the holidays with additional post-Christmas promotions. This year's shorter holiday shopping period placed pressure on some retailers, some of which also struggled to attract inflation-weary consumers through their doors.

"So far, post-Christmas discounts seem to be slightly bigger than last year," GlobalData retail analyst Neil Saunders told CBS MoneyWatch. "Retailers are working hard to stimulate demand and nudging consumers into spending."

He added, "That said, there is not a dramatic difference. A lot of retailers managed inventory well this year so they don't have loads of stuff left over that they need to shift."

Budget-conscious shoppers have also found bargains during a particularly tough year for some retailers, with store closures surging 69% versus a year earlier, according to research firm CoreSight.

Those 'budget-conscious' shoppers have a lot on their plates right now, not the least of which is trying to stay afloat. The cumulative effects of the wonders of #Bidenomics are catching up.

Defaults on US credit card loans have hit the highest level since the wake of the 2008 financial crisis, in a sign that lower-income consumers’ financial health is waning after years of high inflation.  

Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024, up 50 per cent from the same period in the year prior and the highest level in 14 years, according to industry data collated by BankRegData. Write-offs, which occur when lenders decide it is unlikely a borrower will make good on their debts, are a closely watched measure of significant loan distress. 

“High-income households are fine, but the bottom third of US consumers are tapped out,” said Mark Zandi, the head of Moody’s Analytics. “Their savings rate right now is zero.” 

The sharp rise in defaults is a sign of how consumers’ personal finances are becoming increasingly stretched after years of high inflation, and as the Federal Reserve has left borrowing costs at elevated levels.

The paycheck-to-paycheck crowd is having difficulty in this environment, particularly with interest rates ratcheting into the stratosphere on missed payments.

...As covered here earlier this month, the share of consumers carrying at least some card debt is pervasive, at 74.5%, per PYMNTS Intelligence research. While that percentage is more or less static across income levels, it leaps to more than 90% for consumers living paycheck to paycheck and having trouble paying their bills.

The research showed that the average outstanding balance among paycheck-to-paycheck cardholders who have issues paying their bills is $7,038, compared to those who live paycheck to paycheck without such difficulties, who had average outstanding balances of $5,766.

But what the heck? It's not like Yellen or Powell or doing any better managing everyone's money.

Even after another interest rate cut which has reduced the costs of conducting RRP operations and the IoR policy, the Fed is still shelling out $457 million PER DAY in interest payments, resulting in unprecedented losses to the taxpayer, and gains to Wall Street: pic.twitter.com/1aMImwCffl

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 26, 2024

Or pretending they read tea leaves.

This is the Fed economic projection from 3 months ago.
Versus Expectations:
GDP is 40% higher.
Unemployment is 7% lower.
Core Inflation is 8% higher.
The fact they are cutting today is living proof they have failed at managing prices and employment. pic.twitter.com/hoVzWFNxdB

— Frog Capital (@FrogNews) December 18, 2024

That pesky old inflation we kept being told was dropping. Heh.

Good times, good times.

Another sign of the times also slipped - the Purchasing Managers' Index (PMI) dropped as new orders fell for many for the first time since the 2020 lockdowns. That's not the comparison anyone wants.

MNI: Chicago PMI plunges for Dec, ending '24 on sour note as over half of respondents saw new orders drop for 1st time since Jun '20 when there were gov't-imposed lockdowns; future sentiment may be rising since Trump's win, but current conditions are still deteriorating fast: pic.twitter.com/O3t513Se71

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 30, 2024

If managers do not foresee needing products, obviously, they are not ordered.

Also, some analysts believe the Fed has been too sanguine about the labor market, as they project that the unemployment rate will stay where it is for the next three years or so. New Century Advisors Chief Economist Claudia Sahm said she found that attitude, "remarkable" and is more worried about a labor meltdown than inflation dangers.

Wonder why?

'Real' job growth hasn't been a #Bidenomics thing.

Since Jun '23, we've only added part-time work, w/ net losses in full-time employment; were it not for so many people getting additional part-time gigs, the jobs numbers would be steadily falling: pic.twitter.com/VDGx3vzyyW

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 6, 2024

And what jobs people do have aren't keeping up with the inflation the Democrats and their spending spawned.

Part of the resentment is also underemployment. If you're bounced back long enough you take what you can get.

You take the guys who get mass layed off when their department decides to outsource or bring in visa labor like Disney.

They'll get a job. Just a worse one.

— Ben (@bschrdr07) December 28, 2024

Meanwhile, the daffyy little gnome over at Treasury has her hands full. The Chinese supposedly hacked into her system.

Of course, China hacked the U.S. Department of Treasury in a “major incident”

21 days until DJT is back running America & back in the White House

Until then, buckle up buttercups. We have no President & our enemies will do anything they can to derail the inauguration of DJT &… pic.twitter.com/A1qXoU6Y07

— Kylie Jane Kremer (@KylieJaneKremer) December 30, 2024

And she's been busy draining the cash reserves even as she warns about an imminent and critical debt ceiling event.

Debt limit kicks in Jan 1 and will almost immediately bite b/c the gov't is constantly borrowing to pay its bills; an artificially low debt on that date (fed by draining Treasury cash) also sets the borrowing limit artificially low, so extraordinary measures won't last as long:

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 30, 2024

What does that mean to the incoming Trump Secretary of the Treasury, Scott Bessent?

He's got his hands tied before he even takes office.

Leaving a somewhat depleted cash reserve (the opposite of what Yellen inherited, the largest Treasury cash balance ever) will give the next Treasury secretary less flexibility just as bonds yields are rising; and less cash obviously means extraordinary measures run out faster...

Slick, huh? 

It's pretty amazing that not only was the now near-empty Treasury literally flush with cash as terrible Trump left the office for the first time, but the same consumers now struggling were doing alright, too - especially the working stiffs.

...Americans left the coronavirus pandemic with large balances of cash, buttressed by high levels of stimulus spending; however, credit card balances started to soar in 2022 and 2023. The spike in American consumer spending, along with supply chain shocks and excessive levels of spending under President Joe Biden, led to high inflation.

In response, the Federal Reserve raised interest rates, thus boosting credit card rates and other borrowing costs. Higher loan balances and interest rates pushed Americans to pay $170 billion in interest in the year prior from September 2024.

Now Biden's treasury secretary is siphoning off what cash is on hand like she was her vegetative boss with his hand around the Strategic Petroleum Reserve drainplug.

I don't want to say they're setting Trump and his team up, but...I'm just that kind of cynic at heart, too.

'Don't spend what you don't have to' doesn't only work for paycheck-to-paycheck households.