Americans Saving Less Despite Inflation, Raising Risks While Fueling Economy

Americans have been saving less money in recent years compared to before the pandemic, contributing to strong consumer spending despite high inflation.

The personal saving rate fell to just 3.6% in February, the lowest level in over a year, continuing a long-term downward trend.

Lower savings rates leave American households more financially vulnerable in the event of an economic downturn or shock.

Americans have changed their spending habits coming out of the pandemic, dipping into retirement funds and increasing use of services like Buy Now, Pay Later to maintain elevated spending.

Some companies are considering shorter 4-day workweeks to combat employee burnout and boost wellbeing, with evidence it can improve productivity.