Investing.com — Americans are starting to run out of pandemic savings this year, and with a recession predicted for next year due to high inflation, high consumer spending is also an important factor, writes Business Insider.
The personal saving rate, that is, the share of income Americans set aside this month, fell to 2.3% in October, the lowest level since 2005 and the second lowest on record since 1959. While households accumulated some $2.5 trillion in excess savings during the pandemic, thanks in part to stimulus checks and increased unemployment benefits, inflation is pushing consumers to spend more and save less.
But sky-high prices — is not the only reason Americans' savings are shrinking. Even with rising inflation, consumer spending rose 0.5% in October, the biggest since January, which RSM Chief Economist Joseph Brucelas says is a real sign of resilient economies.
According to him, in the US today “it is easy to find a job, people are confident and will continue to spend.” His words are confirmed by the fact that many companies showed high earnings during the reporting for the third quarter. With more than 10 million jobs and unemployment at a 50-year low, some Americans may feel like they no longer need the financial cushion they could count on if they were out of a job.
< p dir="ltr">However, this situation will not last long: experts expect the US to enter a recession next year, which is expected to coincide with a decrease in vacancies and a rise in the unemployment rate.
— Materials from Business Insider
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