American households fully spent their pandemic-era savings as of March 2024
https://news.yahoo.com/finance/news/americans-spent-savings-economists-worry-113203731.html
Americans have spent their savings. Economists worry about what comes next
Analysis by Nicole Goodkind, CNN
Tue, May 7, 2024 at 4:32 AM PDT·6 min read
Americans saved quite a bit of money during the pandemic: $2.1 trillion worth, to be exact.
That extra cushion meant that consumers kept spending in the years that followed and the economy remained robust despite rising interest rates and persistent, though gradually decreasing, inflation.
But now that extra spending money is gone, economists are concerned about what comes next.
What’s happening: The most recent estimates of excess pandemic savings in the US economy have turned negative, according to Hamza Abdelrahman and Luiz Edgard Oliveira, economists at the San Francisco Federal Reserve.
That means many Americans have more debt than savings and suggests “that American households fully spent their pandemic-era savings as of March 2024,” they wrote in a recent report.
Consumer spending plays a crucial role in driving economic growth in the United States, and it has shown remarkable strength over the past two years. But now that excess savings have now dwindled to nothing, that could hurt spending and spell trouble for the American economy.
Alarmingly, debt is also accumulating. Chicago Federal Reserve President Austan Goolsbee said last month that while consumer debt levels aren’t yet “especially” high, the Fed is concerned about the rate of consumer delinquencies, or missed or late payments on expenses such as auto loans, credit card bills and rent.
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