Americans Are Stockpiling Goods—But It Might Not End Well

Americans Are Stockpiling Goods—But It Might Not End Well

With inflation looming and prices set to rise, U.S. businesses and consumers are buying up everything they can, trying to beat the clock. The Federal Reserve Bank of Chicago reports that businesses are building up inventories for the next 60-90 days, while consumers are scooping up big-ticket items—electronics, vehicles, you name it—earlier than planned.

This rush to buy could make the economy seem stronger in the short term, especially in April, but there’s a catch. Once these early purchases are made, things could slow down by summer. And here's where it gets sticky—credit card debt is spiraling out of control. In just the last quarter of 2024, U.S. consumers added a whopping $45 billion in credit card debt, pushing total balances to $1.2 trillion.

To make matters worse, delinquencies are up, with 11% of credit card debt now 90 days late, the worst since the Great Recession. Yet, big banks claim everything's fine. Could it be that they’re only saying that because when the inevitable crisis hits, they know they'll get the bailout?

Meanwhile, small and mid-size businesses are already feeling the squeeze. Those that depend on imports—like auto repair shops and electronics retailers—are facing rising costs but don't have the luxury of stockpiling inventories like bigger companies. And with tariffs possibly set to rise again in July, these businesses may have no choice but to lay off workers, raise prices, or even close shop.

It's a house of cards, and it’s teetering. If the economy doesn’t adjust soon, the fallout will likely be felt by everyone—consumers, businesses, and the economy as a whole.