Hamza Abdul Rahman and Luis Oliveira, economists at the Federal Reserve Bank of San Francisco, said in a blog post on Friday that “the latest estimates of the excess savings remaining due to the pandemic in the US economy have turned negative, indicating that US households will have spent their entire savings in the era of epidemic by March 2024.” .
The savings surplus accumulated during the pandemic, or the difference between actual savings and the pre-pandemic trend, swelled to $2.1 trillion from March 2020 to August 2021. Since then, households have enjoyed an average of $70 billion per month in these savings; That spending rose to $85 billion a month last fall before falling to $72 billion in March, according to analysts.
As long as Americans can maintain their spending through other means, such as continued employment or wage growth, other savings or accumulating more debt, the drain of additional money due to the pandemic is unlikely to lead to an overall decline in consumer spending, according to the Federal Reserve. Economists.
New York Federal Reserve Bank President John Williams said Monday that retailers say many consumers are “more cautious about spending.” Low- and middle-income households in particular have spent their pandemic reserves, and “we're seeing delinquency rates on credit cards and auto loans go up a little bit,” Williams said at the Milken Institute Global Conference in Los Angeles.
Looking at the big picture, this economy is still healthy but growing at a slightly slower pace
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