High inflation erases pandemic savings, leaving consumers vulnerable and threatening economic slowdown
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Household savings as a percentage of total consumption have returned to 2019 levels for most Americans due to high inflation.
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Consumer spending could start to pull back with less of a savings buffer, pushing the economy into a slowdown.
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Cash savings were expected to cushion the economy, but excess savings have been wiped out by inflation.
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Credit card debt hit a record high in 2022 as consumers' financial health deteriorates.
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Student loan payments restarting plus high inflation could lead consumers to pull back spending, possibly causing an economic slowdown.