Banks Are Doing Better Than Ever. The Middle Class, Not So Much.


The nation’s banks are reporting record profits, according to new numbers out Wednesday from the Federal Deposit Insurance Corporation (FDIC). Most of the rest of us aren’t faring quite so well.

Bank profits topped $40.3 billion in the first three months of the year, according to the FDIC, attesting to a strong recovery… in the banking sector. “The banks are back,” Moody’s Analytics chief economist Mark Zandi told the Washington Post Wednesday. “Only four years after the banking system was literally looking into the abyss, it is highly profitable again.” The biggest banks, including Wells Fargo, Bank of America and Citigroup, accounted for most of the industry’s profits. Here’s what that looks like, via the Post:

The wider economy hasn’t shared the banking sector’s return to prosperity. Yes, the unemployment rate has dropped a little. Consumer confidence is up. The housing market is healthier. But the current share of the population that is employed is still well below what it was before the recession. Here is a chart from the Center on Budget and Policy Priorities:

The housing market hasn’t bounced back at the same pace as bank profits, either. As Derek Thompson pointed out at The Atlantic earlier this year, overall business investment is growing, but companies are still reluctant to invest in housing. Here is what that looks like—the red curve is residential housing investment; the blue curve is non-housing investment:

The new FDIC numbers also show that loan balances at banks shrunk in the first three months of the year. As Isaac Boltansky, a banking analyst with Compass Point Research and Trading, told the Post, that’s “a sign that the broader economy still has room for improvement.” Indeed.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate