As peoples’ savings dwindle and companies start to notice, a recession seems more likely.
Data from August showed that US households have spent about $270 billion of a $2.4 trillion savings cushion, according to the Bureau of Economic Analysis.
People were able to stash away a bit of cash during the early days of the pandemic as in-person spending diminished and stimulus checks were sent out. This trend peaked in the middle of 2021 as the economy reopened and spending rebounded, but surging inflation has led many to tap their savings.
As prices for nearly everything continue to soar, peoples’ savings are shrinking, and stores like Target, Walmart and even Amazon are noticing.
Retail sales are expected to climb just 4% to 6% between November 2022 and January 2023; that’s down from the 15.1% gain posted during the same period last year, according to Deloitte’s September report.
Easing inflation could help Americans’ savings, and a stock market rebound could give households the flexibility to spend more as well, according to Business Insider.
