Karen LeSage needs her car.

A 57-year-old single mother living in East Hartford, Connecticut, LeSage needs to drive herself to medical appointments for injuries on her legs and to pick up her teenage daughter, who often suffers from seizures, from school.

‘I have to go pick her up,” LeSage says. Without the vehicle, she adds, ‘I wouldn’t be able to do that.”

But last year, LeSage was told her car was at risk of repossession after she fell behind on the payments.

“For me, every penny counts and just to lose a couple of cents on gas is devastating sometimes,” LeSage says.

LeSage is among a growing number of Americans who have found themselves confronting financial hardship as the U.S. economy has slowed. On Thursday, the U.S. Bureau of Economic Analysis reported gross domestic product fell to 1.1% in the first quarter, the lowest reading in nine months. The GDP is the value of the final goods and services produced in the country and a strong indicator of how healthy the U.S. economy.

Strapped for cash

The slowdown is starting to show up in Americans’ personal finances. According to a recent survey from Bankrate, 49% of U.S. adults have less savings compared to a year ago. Ten percent of those surveyed said they have no savings at all.

The upshot: The most disastrous outcomes for U.S. households, like auto repossessions and home foreclosures, have begun to climb.

“As a result of the expiration of government stimulus and current [economic] headwinds, we have seen delinquencies ticking up in this space over the last several months,” said Margaret Rowe, a senior director at Fitch ratings group.

Fitch data show U.S. auto loan delinquencies among subprime borrowers have just about returned to pre-pandemic levels from the record low set in summer 2021. 

Meanwhile, home foreclosure filings have begun to surge. According to data from ATTOM, a property analytics company, U.S. foreclosure filings totaled 95,712 in the first quarter of 2023. That’s 6% higher than in the previous quarter and 22% higher than a year ago.

March alone saw 36,617 U.S. properties in foreclosure, a 20% increase compared to February and 10% higher than a year ago. It was the 23rd consecutive month with a year-over-year increase in foreclosure activity.

In an emailed statement, Attom CEO Rob Barber noted some of the increase in foreclosure activity can be explained by lenders working through a backlog that had built up while the pandemic-era federal foreclosure moratorium was in place. That pause ended in July 2021.

By that point, he said, an estimated 2 million homeowners had fallen behind on their home loans amid job losses and other hardships brought on by the pandemic.

Overall, Barber said, the increase since then hasn’t been nearly as severe as some economists and industry experts expected. Many homeowners benefited from a strong pandemic-era economic rebound — one that included a yearlong home-buying spree during a period of low interest rates, he said. Unemployment also remains at historic lows; the relative job stability has allowed many delinquent homeowners to catch up on mortgage payments.

And as home prices have skyrocketed over the past couple of years, homeowner equity has increased — something Barber said has provided an incentive for delinquent homeowners “to find a way to get back up to date on their loans.”

He noted ATTOM data shows 94% of homeowners with mortgages had at least some equity built up in their properties in the fourth quarter of last year, with nearly half being “equity-rich,” meaning they owed less than half of what their properties were worth.

“More income, more equity and lower payments set the stage for a more modest rise in foreclosures than predicted,” Barber said.

But the outlook for the rest of the year remains murky, he said, given the changing housing market, higher mortgage interest rates and inflation.

“It’s likely that foreclosure filings will keep rising, but nothing like we saw back when the bubble burst in 2008,” Barber said, referring to the start of the financial crisis of 2008 and 2009.

Rick Burrows, 61, from St. Charles, Missouri, was about $23,000 away from paying off his loan when his lender began the foreclosure process on his house late last year.

Burrows lives alone and has been in his current house for more than two decades. In 2020, he was hospitalized with Covid-19 for two months and spent around seven weeks on oxygen. The experience pushed him into unemployment for several months, which caused his credit score to plummet.

In 2021, his car, which he uses to serve legal papers, was repossessed.

“It seems like every time I turn around financially, just as I start to be able to get back on solid ground something else happens,” Burrows said.

Today, he still suffers from the long-haul effects of Covid which often leave him fatigued while working. Burrows said his income varies between $1,500 to $2,500 per month. With fluctuating prices on everything from groceries to gasoline, he struggles to keep himself afloat while managing the additional medical bills for physical therapy.

A recession comes into view

Fitch economists expect a ‘mild recession’ later this year, Rowe said, even as analysts anticipate unemployment to stay relatively low.

Still, she said, ‘the expectation is that deterioration [in credit quality] will continue.’

In January, Taqwetta Crawley, 43, lost her home in Hampton, Connecticut, to foreclosure. She had fallen into a predatory loan and when the pandemic hit, she was left with no means to pay her mortgage, which soared from $95,000 to $250,000.

Crawley now lives with her sister.

“I’m literally living off the charity of other people,” she says. “That’s how I’m existing.”

She said she hopes people would be more compassionate toward those experiencing foreclosures.

“I had so many investors, I had so many wholesalers, I had at least three scammers who came into my house and treated me like absolute trash, like I was in the way of them making money, [who didn’t allow] me to maintain my dignity for what it is that I was about to lose,” she says.

In retrospect, she wishes she had known the options that were available to her and now she is refocusing her efforts to educate others who are experiencing similar hardships.

Where to find help

Help is indeed available for homeowners, said Sarah Bolling Mancini, a senior staff attorney at the nonprofit National Consumer Law Center. Some of those resources include the Homeowners Assistance Fund, a Covid-era support program. Mancini said homeowners should be proactive in talking to their lender or mortgage servicer, most of which have forbearance programs available that can help distressed homeowners buy some time.

“It’s important for consumers to reach out proactively,” she said.  

Unfortunately, there is less support for renters, as pandemic-based assistance programs have mostly been exhausted, according to Mancini.

Crawley says her biggest desire now is to become financially stable for her daughter.

“I want people to understand that a foreclosure and eviction is not indicative of a person being untrustworthy, or a person that doesn’t deserve any sort of empathy or compassion,” Crawley said. “Things happen, situations occur. And some people just don’t have the support system. They don’t have that village, they don’t have the resources, the job that will allow them to fully handle everything.”

Looking back, Burrows, the Missouri resident, said he wishes he had put more money away.

“I would have tried to save more money, or try to find a way to put money back where I could at least have a cushion to fall on,’ he said. ‘Because right now, I don’t have a cushion. I don’t have a cushion at all.”

Plans by Levi’s to test out virtual clothing models generated by artificial intelligence drew swift backlash in the industry late last month. While the furor mainly focused on diversity concerns, the retailer’s proposal also stirred up other anxieties that have been simmering in the industry for years.

Some critics of Levi Strauss & Co.’s partnership with AI design firm Lalaland.ai, which aimed to show online shoppers different types of people wearing Levi’s garments, accused the retailer of looking to inexpensively address issues of representation — potentially pushing professional models out of their jobs in the process.

“When you have to hire a model, book an agency, have a stylist, do the makeup, feed them on set — all that costs money,” said Shawn Grain Carter, a professor of fashion business management at the Fashion Institute of Technology in New York. “Let’s make no mistake about it, Levi’s is doing this because this saves them money.”

A Levi’s spokesperson referred to a statement in which the company denied any intentions to save costs with the project. The retailer said that the AI models it planned to introduce would supplement but not replace its photoshoots with live models. Lalaland didn’t respond to a request for comment.

Worries about technology displacing human labor are nothing new, and they’re far from distinct to the fashion workforce. But while AI has been used in fashion for years, some workers are watching its expansion in the space with growing alarm.

Yanii Gough, a model and the founder of Yanii Models, where she works with over 100 models, said that many are still “dying to get back to consistency” as the industry re-emerges from pandemic-related disruptions.

With the rise of AI modeling firms, clients can simply “send an email to the agency and say, ‘Hey, this is exactly what I’m looking for,’ and someone will find that person,” she said, referring to companies that book models for everything from photoshoots to fittings.

There is some precedent for concerns like Gough’s.

Shudu, created in 2017 and thought to be the world’s first digital supermodel, has booked gigs within the past year with high-end brands such as BMW and Louis Vuitton. Shudu, who was designed as a Black woman, also drew criticism toward The Diigitals, the AI modeling agency that created her, and its founder, Cameron-James Wilson, who is white.

Today, options continue to expand for brands and advertisers looking to use AI to help market and sell clothes. In addition to Lalaland, there’s also Deep Agency, a new AI startup that allows users to create a virtual photoshoot with either synthetic models or an AI version of a real person.

Gough said she also worries about models’ images being used without their permission via AI, a concern that Sara Ziff, the founder of a nonprofit advocacy group called the Model Alliance, said she is hearing as well.

“Fit models may be replaced by AI body scans,” she said, adding that these models — who try on clothes for designers and manufacturers to check sizing and silhouettes — are already calling her organization in growing numbers.

Ziff said some have complained that companies are hiring them to conduct body scans, which can form the basis for product development without their knowledge or receiving compensation.

“So they’re able to design the clothes on virtually using a scan of the model’s body, rather than actually having to book the model in person,” said Ziff, who declined to provide examples, citing the Model Alliance’s policy of maintaining an anonymous hotline for industry workers to flag complaints.

Fashion brands have defended their AI efforts as add-ons that benefit shoppers, and the AI design studios and agencies working in the space similarly describe their efforts as supplemental. Lalaland’s founders, for example, have said they created the company to sustainably increase representation in fashion.

Agents and management companies who book models for the types of jobs Ziff described don’t legally have to tell them their body scans could be used on more projects without compensation, she said. Ziff is advocating for the proposed Fashion Workers Act in New York, which she said would force agencies to more fully disclose the scope of work and pay.

Current law leaves some gray area around models’ rights to organize unions, Ziff added, resulting in limited labor protections.

Because most models are considered independent contractors, many face heightened risks of being sued or retaliated against by their agencies. Representatives for other professionals in creative fields, like the Writers Guild of America, have the power to propose standards and best practices for AI use in their industries.

Meanwhile, AI models have become so realistic that it’s already impossible for many consumers to distinguish them from images of humans. Ashley France, an influencer who criticized Levi’s partnership with Lalaland, said she hopes regulators will step in.

“The same way that we have to put a PSA that something’s an ad, or that something’s a dietary supplement — or now, thankfully, that something is photoshopped — I feel like it should be the same type of regulations,” France said.

First Republic Bank has been taken over by federal regulators and will be sold to JPMorgan — making it the third major bank to go under in less than two months.

The Federal Deposit Insurance Corp. announced simultaneously Monday morning that it had seized the bank and that JPMorgan Chase, the largest bank in America, would be purchasing substantially all of the bank’s assets and deposits.

A spokesperson for the Treasury Department sought to reassure the markets and the public after First Republic, with $229.1 billion in total assets at the time of closure, eclipsed Silicon Valley Bank ($209 billion at the time of closure) to become the second-largest bank failure in American history.

“The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfill its essential function of providing credit to businesses and families,” the spokesperson said in a statement.

The intervention comes days after First Republic reported losing about 40% of its deposits in the first quarter of the year. Amid rising interest rates and after the failures of Silicon Valley Bank and Signature Bank this year, a growing cohort of depositors sought to move their money to banks seen as safer and offering more attractive returns.

Among medium-sized banks, First Republic was most affected by the trend: As of mid-March, about 70% of its deposits were uninsured, according to Bank of America, meaning they were larger than the FDIC’s $250,000 guaranteed limit.

That compares with a median of 55% uninsured deposits for medium-sized banks and the third-highest level after SVB and Signature Bank.

Despite a $30 billion infusion from 11 peer banks in mid-March, First Republic couldn’t stop the bleeding: Its stock fell more than 75% over the past 30 days.

The scale of the San Francisco-based lender’s deposit losses were an outlier compared with other regional banks, which saw a roughly 5% decline in deposits on average this year, according to Goldman Sachs Research.

Still, the rapid flight of deposits from First Republic had “created a lot of anxiety across the industry,” said Tim Coffey, managing director at Janney Montgomery Scott, a financial services group.

In addition to the uninsured deposits, First Republic was also carrying many loans with fixed, long-term interest rates that have begun to lose value as the Federal Reserve has repeatedly hiked its benchmark rate.

First Republic had said in a press release last week that it was seeking help to reshape its balance sheet after the massive deposit flight.

On Friday night, the bank said: “We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients.”

CNBC’s David Faber reported last Tuesday that First Republic had been looking to sell assets to larger banks while it raised additional equity, but it was unclear if other banks would be willing to buy. Bloomberg News also reported last Tuesday that First Republic was looking to sell up to $100 billion of loans and securities to restructure its balance sheet.

The lender had already ruled out a full sale to another bank, Faber reported.

By Friday afternoon, Reuters was reporting that an FDIC seizure was imminent after hopes of finding a private-sector solution fell through.

Over the weekend, the government moved to take bids on First Republic, as the FDIC hoped to announce a closure of the firm alongside a purchase agreement.

JPMorgan Chase was the winner.

“Our government invited us and others to step up, and we did,” JPMorgan Chase CEO Jamie Dimon said in a statement Monday morning. “Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”

First Republic’s 84 branches in eight states will reopen Monday as branches of JPMorgan Chase.

The FDIC estimates the cost of First Republic’s receivership will be about $13 billion, less than the $20 billion it estimated as the cost from SVB’s failure.

High prices. High interest rates. Slowing growth.

It would all seem to spell an economic downturn.

Indeed, many consumers would agree that between inflation and tighter credit conditions — and with no more pandemic financial assistance in sight — this is the worst they’ve felt about their finances since Covid swooped in and upended everything.

Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee on March 7.Win McNamee / Getty Images

Yet, as the Federal Reserve gets ready to make its latest announcement Wednesday afternoon about whether it will raise its key federal funds rate for the 10th consecutive time, financial commentators continue to disagree about how it should respond to economic conditions.

According to data from the CME Group, Wall Street traders are betting that the Fed will announce another 0.25% rate hike Wednesday — but that it will be forced to cut rates at least twice before the end of the year as economic growth slows to a crawl.  

Others disagree about how exactly this all plays out. In an emailed statement, Seema Shah, the chief global strategist at Principal Asset Management, said that with inflation still elevated and sticky and with the broad economic picture still looking ‘fairly robust,’ the Fed is actually more likely than not to keep additional rate hikes on the table.

‘Provided the economic data slows only gently and inflation remains elevated, and the banking sector volatility is fairly contained, we think a June hike is still possible,’ she wrote. ‘Indeed, we believe there is a higher risk of a rate hike in June than what the market is currently pricing in.’

That is largely the view of economists at Citi, as well. In a note to clients published Sunday, the group said it expects the Fed to strike a “hawkish” tone in its latest language announcing the expected rate hike — meaning it will indicate inflation has not yet been tamed and, therefore, interest rates must remain elevated for longer.

The Citi analysts cite recent price-level data that has continued to come in higher than expected. The graphic below from the Atlanta Federal Reserve illustrates this:

‘Rather than signaling a pause, the committee will want to preserve the option for further rate hikes,’ the Citi economists write. ‘In our base case the Fed will raise rates by 25bp [0.25%] this week and again in June and July.’

The forecasts are being countered elsewhere. Heading into Wednesday, the chorus of voices calling for the Fed to pause kept growing. On Tuesday, Sen. Elizabeth Warren, D-Mass., and Rep. Pramila Jayapal, D-Wash., called on Fed Chair Jerome Powell to halt rate hikes entirely, warning that too many increases would cost a growing cohort of people their jobs.

‘We believe that continuing to raise interest rates would be an abandonment of the Fed’s dual mandate to achieve both maximum employment and price stability and show little regard for the small businesses and working families that will get caught in the wreckage,” they wrote.

Analysts at Nomura global financial services group offered something of a middle ground: While they forecast the Fed will raise the rate by the expected 0.25%, it will prove a “dovish hike” as the central bankers replace previous language that signaled additional hikes will be necessary, planning to take a more wait-and-see approach.

Perhaps the best summation of the economic crosswinds facing the Fed was found in an anonymous response to the monthly report from the Institute for Supply Management, which showed a modest increase in sentiment among producers for April.

‘We seem to be in a season of contradictions,’ said the respondent, identified only as an executive at a metals manufacturing firm. ‘Business is slowing, but in some ways, it isn’t. Prices for some commodities are stabilizing, but not for others. Some product shortages are over, others aren’t. Trucking is more plentiful, except when it isn’t. There’s uncertainty one day, but not the next. The next couple of months should provide answers — or not. It’s hard to make projections at the moment.”

For Shah, that signals the worst outcome of all.

‘The most dangerous risk for financial markets currently is stagflation — the risk of the Fed failing to deliver sufficient tightening, permitting a resurgence in inflation later on in the year,’ she wrote.

DETROIT — General Motors plans to end production of its electric Chevrolet Bolt models by the end of this year, CEO Mary Barra told investors Tuesday when discussing the company’s first-quarter earnings.

The Chevy Bolt EV and EUV, a larger version of the car, make up the vast majority of the company’s electric vehicle sales to date. However, the battery cells in the cars are an older design and chemistry than the automaker’s newer vehicles such as the GMC Hummer and Cadillac Lyriq, which utilize GM’s Ultium architecture.

Barra said a suburban Detroit plant that has produced Bolt models since 2016 will be retooled in preparation for production of electric trucks scheduled for next year.

There’s irony in the timing of the Bolt getting axed. It comes amid record production and sales of the vehicle for mass-market consumers, which was GM’s initial goal.

The company plans to produce more than 70,000 of the vehicles this year, as it targets to sell more than 400,000 EVs from early 2022 through mid-next year in North America.

GM pushed the Bolt out ahead of the Tesla Model 3 in 2016. The two were considered to be the first long-range EVs designed for mainstream drivers, starting at around $35,000.

But Bolt sales never caught on as well as many executives hoped, as EV sales overall remained miniscule outside of Tesla. The Bolt also suffered a major setback more recently, as GM recalled all of the Bolts ever produced due to a supplier-related battery issue.

“When the Chevrolet Bolt EV launched, it was a huge technical achievement and the first affordable EV, which set in motion GM’s all-electric future,” Chevy spokesman Cody Williams said in a statement. “Chevrolet will launch several new EVs later this year based on the Ultium platform in key segments, including the Silverado EV, Blazer EV and Equinox EV. ”

GM expects to launch its upcoming EVs far faster than it has its high-end Hummer models and Cadillac Lyriq, which have been rolling out at a snail’s pace compared to its traditional vehicles.

Barra said when the Orion, Michigan, plant, which currently produces the Bolts, reopens and reaches full production, employment will nearly triple, and the company will have capacity to build 600,000 electric trucks annually.

GM has set a target to reach production capacity of 1 million EVs annually in the U.S. and in China, each, as it attempts to catch up to industry leader Tesla.

The Walt Disney Co. on Wednesday filed a lawsuit in federal court against Florida Gov. Ron DeSantis and other officials alleging a ‘targeted campaign of government retaliation’ after the company publicly opposed a state law that critics call ‘Don’t Say Gay.’

Disney and DeSantis have been embroiled in a feud over Walt Disney World’s self-governing privileges in the Orlando area, which the possible Republican presidential contender has threatened to revoke. The corporation is one of the state’s largest employers and a key driver of tourism.

The power struggle started when Disney, under then-CEO Bob Chapek, criticized the Florida government for a state education law that opponents have dubbed ‘Don’t Say Gay.’ DeSantis signed the bill into law in March 2022 amid growing speculation that he might challenge former President Donald Trump for the 2024 GOP nomination.

Disney’s lawsuit, filed in U.S. District Court for the Northern District of Florida, dramatically escalates the fight. The company alleges that a retaliation campaign was ‘orchestrated at every step by Governor DeSantis as punishment for Disney’s protected speech’ and ‘now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.’

‘Disney regrets that it has come to this,’ the company said in the first section of the lawsuit. ‘But having exhausted efforts to seek a resolution, the Company is left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain State officials.’

In a statement to NBC News, a spokesperson for DeSantis said: ‘We are unaware of any legal right that a company has to operate its own government or maintain special privileges not held by other businesses in the state. This lawsuit is yet another unfortunate example of their hope to undermine the will of the Florida voters and operate outside the bounds of the law.’

The California-based corporation announced it had filed suit just minutes after a local governing board appointed by the conservative governor passed a resolution to void an agreement that allowed the Walt Disney World theme park and resort to keep control over much of its business operations in Florida.

‘Disney was openly and legally granted a unique and special privilege, that privilege of running its own local government,’ Alan Lawson, a former Florida Supreme Court justice whose firm was hired by the DeSantis-appointed board, said during the board meeting. ‘That era is ending.’

The Walt Disney Co. and Florida Gov. Ron DeSantis have been feuding for months.NBC News; Getty Images

How Disney and DeSantis got here

The legislation at the root of the conflict, the Florida Parental Rights in Education law, bans classroom lessons on sexual orientation and gender identity in early grades. Chapek, the former Disney CEO, publicly criticized the legislation last year after employees and LGBTQ advocates pressed him to take a more forceful stand.

In response, Florida assumed control of Disney World’s self-governing district and tapped a new board of supervisors that would oversee the special tax district that encompasses the theme park and resort property.

Disney then fired back at the Central Florida Tourism Oversight District board with an agreement that essentially stripped the supervisors of their power.

The board said earlier Wednesday that Disney’s move to keep control over its property was unlawful.

Disney ousted Chapek in late November and replaced him with a familiar face: Bob Iger, who ran the entertainment conglomerate for 15 years and had stepped aside in the early days of the pandemic.