The U.S. economy is going through a new challenge, and this is driven by the personal savings of its population, according to “Barchart,” a company specializing in data, economy, and technology.
Through its social networks, the firm announced that the money kept by Americans has fallen by 5.5 trillion dollars from April 2020 to date, derived from inflationary levels both in the North American nation and around the world.
Previously, personal savings rose in the COVID-19 pandemic due to factors such as the checks provided by the government to support the population and a decrease in spending by each individual.
“Since COVID rules were eased, the cash pile has supported consumer spending, helping the economy even as the Federal Reserve raised interest rates abruptly,” Insider reported.
Oxford Economics forecasts that U.S. consumer spending could fall by more than $100 billion annually, raising the risk of an economic downturn.
The great enemy
According to Barchart, who takes data from Bloomberg, the cause of the decline in Americans’ personal savings is inflation.
Currently, inflation stood at 3% in June, and the Fed’s benchmark rate ranges between 5% and 5.25%.
In addition, the Fed raised borrowing costs by 500 basis points at the beginning of 2022 in order to control inflationary levels.
“70% of people say they are stressed about their personal finances, and one of the reasons that contributes to this is inflation, economic instability, and a lack of savings,” Sharon Epperson, CNBC’s senior financial correspondent for Telemundo, said.
