{"id":36443,"date":"2022-06-04T13:50:28","date_gmt":"2022-06-04T13:50:28","guid":{"rendered":"https:\/\/harchi90.com\/ceos-warn-that-us-households-are-burning-through-savings-at-an-alarming-rate-and-could-run-out-within-months\/"},"modified":"2022-06-04T13:50:28","modified_gmt":"2022-06-04T13:50:28","slug":"ceos-warn-that-us-households-are-burning-through-savings-at-an-alarming-rate-and-could-run-out-within-months","status":"publish","type":"post","link":"https:\/\/harchi90.com\/ceos-warn-that-us-households-are-burning-through-savings-at-an-alarming-rate-and-could-run-out-within-months\/","title":{"rendered":"CEOs warn that US households are burning through savings at an alarming rate, and could run out within months"},"content":{"rendered":"<div>\n<figure class=\"caas-figure\">\n<div style=\"\">\n<div>\n<div class=\"caas-img-container noheight\"><\/div>\n<\/div>\n<\/div>\n<p><figcaption class=\"caption-collapse\">US households are burning through savings at an alarming rate, and could run out within months<span class=\"copyright\">Alexander Spatari \/ Getty Images<\/span><\/figcaption><\/p>\n<\/figure>\n<ul class=\"caas-list caas-list-bullet\">\n<li>\n<p>US households gained about $ 2.5 trillion in excess savings since March 2020 from stimulus and higher wages.<\/p>\n<\/li>\n<li>\n<p>The extra cash has helped keep consumer spending strong, which in turn has driven prices higher.<\/p>\n<\/li>\n<li>\n<p>Now inflation is gnawing away at those savings, and CEOs warn they could run out within months.<\/p>\n<\/li>\n<\/ul>\n<p>The US economy has been mostly beating expectations for two years now, thanks in large part to consumers eagerly buying just about everything that companies could sell them.<\/p>\n<p>Much of this spending was powered by an estimated $ 2.5 trillion in excess savings that households accumulated due to federal pandemic aid and higher wages at work.<\/p>\n<p>One result of this roaring consumer demand has been an increase in the price of goods and services, otherwise known as inflation.<\/p>\n<p>But with inflation at a 40-year high this year, Americans are finding their monthly income isn&#8217;t going as far as it used to.<\/p>\n<p>In April, the personal savings rate in the US ticked down to a 14-year low of 4.4%, according to the latest figures from the Commerce Department.<\/p>\n<p>That&#8217;s half the rate it was in December, and roughly a third of where it was the year before.<\/p>\n<p>Many households are already in negative savings territory, meaning they are increasingly tapping into their savings to cover purchases each month.<\/p>\n<p>&#8220;This isn&#8217;t a normal recovery, and that fiscal stimulation is still in the pocketbooks of consumers,&#8221; JPMorgan CEO Jamie Dimon told investors at a conference this week.  &#8220;They&#8217;re spending it, they&#8217;re spending at very strong levels.&#8221;<\/p>\n<p>But, he added, the drawdown could mean that consumers have only about six to nine months of spending power left.<\/p>\n<p>Dimon&#8217;s remarks echoed comments from PayPal CEO Dan Schulman last week at the World Economic Forum in Davos.<\/p>\n<p>The combination of high spending and high inflation means Americans are burning through savings at a rate that could have them running out by the end of this year, he said.<\/p>\n<p>Indeed, it&#8217;s already happening in the most vulnerable households.<\/p>\n<p><button class=\"link caas-button collapse-button\" aria-label=\"\" title=\"\" data-ylk=\"elm:readmore;slk:Story continues\">Story continues<\/button><\/p>\n<p>&#8220;We are already seeing a reduction in spending at lower-income levels for sure, and it&#8217;s moving up to middle-income right now,&#8221; Schulman said.<\/p>\n<p>More than eight in ten US shoppers are planning to buy fewer things in the next three to six months, according to a recent survey from the market research firm NPD Group.  The survey also found that consumers bought 6% fewer items in the first three months of 2022 than they did during the same period in 2021.<\/p>\n<p>&#8220;There is a tug-of-war between the consumer&#8217;s desire to buy what they want and the need to make concessions based on the higher prices hitting their wallets,&#8221; NPD&#8217;s chief retail industry advisor Marshal Cohen said in a statement.<\/p>\n<p>The slowdown in retail is already dragging on earnings from big box brands like Target and Walmart, and could have ripple effects throughout the economy.<\/p>\n<p>For now, Americans are still spending (and planning to spend) a lot of money: airlines and hotels are reporting strong bookings, and the Commerce data indicate people are prioritizing services over products.<\/p>\n<p>While there are promising signs of these larger economic challenges stating to improve, the next few months will be a delicate balancing act to get prices under control without causing them to crash.<\/p>\n<p>&#8220;There&#8217;s storm clouds\u2026 it&#8217;s a hurricane,&#8221; Dimon said.  &#8220;That hurricane is right out there down the road coming our way. We just don&#8217;t know if it&#8217;s a minor one or Superstorm Sandy.&#8221;<\/p>\n<p>Read the original article on Business Insider<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>US households are burning through savings at an alarming rate, and could run out within monthsAlexander Spatari \/ Getty Images US households gained about $ 2.5 trillion in excess savings since March 2020 from stimulus and higher wages. The extra cash has helped keep consumer spending strong, which in turn has driven prices higher. Now &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/harchi90.com\/ceos-warn-that-us-households-are-burning-through-savings-at-an-alarming-rate-and-could-run-out-within-months\/\"> <span class=\"screen-reader-text\">CEOs warn that US households are burning through savings at an alarming rate, and could run out within months<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/.CAvD1xZVTpT70zMOMz0IA--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyMDA7aD05MDA-\/https:\/\/s.yimg.com\/uu\/api\/res\/1.2\/uuQnCfSq_Ah08IIgP4TVkA--~B\/aD0zODQwO3c9NTExOTthcHBpZD15dGFjaHlvbg--\/https:\/\/media.zenfs.com\/en\/business_insider_articles_888\/dcdb7df98567220977cf27058cc64640","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/36443"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=36443"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/36443\/revisions"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=36443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=36443"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=36443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}