<p>Americans continue to save at dismally <a href="http://dailywire.com/topic/recession">low</a> levels as <a href="http://dailywire.com/topic/inflation">inflationary</a> pressures hit their wallets.</p>
<p>The personal saving rate — the portion of disposable income Americans devote to savings — was 5.4% as of May, according to a report from the U.S. <a href="https://www.bea.gov/news/2022/personal-income-and-outlays-may-2022">Bureau of Economic Analysis</a>. Remaining <a href="https://fred.stlouisfed.org/series/PSAVERT">below</a> 6% for every month of 2022, the measure is far from the 7% to 9% seen over the previous decade.</p>
<p>Yet as savings rates soared beyond 10% and at times above 30% between April 2020 and March 2021, Americans accumulated up to $2.5 trillion in savings, according to the <a href="https://www.brookings.edu/research/bolstered-balance-sheets-assessing-household-finances-since-2019/#:~:text=In%20part%20as%20a%20result,in%20checking%20and%20savings%20accounts.">Brookings Institution</a>, with much of the funds deposited into checking and savings accounts. As the Consumer Price Index (CPI) has <a href="https://www.dailywire.com/news/inflation-reaches-8-6-setting-new-four-decade-high">surged</a> year-over-year to 8.6%, households are now relying upon those reserves to make ends meet.</p>
<p>“Most households have a cash cushion to navigate through the very high inflation,” Moody’s Analytics Chief Economist Mark Zandi remarked, per <a href="https://www.wsj.com/articles/americans-tap-pandemic-savings-to-cope-with-inflation-11657013400?mod=hp_lead_pos1">The Wall Street Journal</a>. “This is allowing consumers to stay in the game.”</p>
<p>Americans, however, are by no means comfortable. As gas and food prices increase at their <a href="https://www.dailywire.com/news/here-are-the-products-gutting-your-bank-account-as-inflation-soars">highest paces</a> in decades, inflation continues to surpass nominal wage growth — leading to a 3% year-over-year drop in real wages as of May.</p>
<p>The tighter budgets appear to be impacting the overall pool of savings. Amid declines in disposable income, personal savings <a href="https://fred.stlouisfed.org/series/PSAVE">fell</a> from nearly $4 trillion in the first quarter of 2021 to slightly over $1 trillion in the first quarter of 2022.</p>
<p>Meanwhile, the University of Michigan’s benchmark Survey of Consumers reached its <a href="https://www.dailywire.com/news/consumer-sentiment-plummets-to-lowest-level-since-1950s">lowest level</a> since 1952 in May. Nearly 70% of the United States’ economic output <a href="https://fred.stlouisfed.org/series/DPCERE1Q156NBEA">hinges</a> upon consumer spending — meaning that a drop in consumer sentiment could signal a looming recession.</p>
<p>“Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines,” Survey of Consumers Director Joanna Hsu said in a statement. “As higher prices become harder to avoid, consumers may feel they have no choice but to adjust their spending patterns, whether through substitution of goods or foregoing purchases altogether. The speed and intensity at which these adjustments occur will be critical for the trajectory of the economy.”</p>
<p>Indeed, recessionary fears are mounting as consumers and businesses face cost pressures. The Federal Reserve Bank of Atlanta <a href="https://www.dailywire.com/news/we-may-already-be-in-a-recession-key-fed-tracker-shows">estimates</a> that the economy shrank at a 2.1% annualized pace in the second quarter of 2022 — a development that would <a href="https://www.dailywire.com/news/united-states-economy-shrinks-in-the-first-part-of-2022">follow</a> the economy contracting at a 1.5% pace in the first quarter, meeting the technical definition of a recession.</p>
<p>The stock market has therefore seen its worst first half of the year in over five decades, with the S&amp;P 500 — which monitors the performance of 500 large public companies — falling more than 21% since the first day of 2022. As a <a href="https://www.dailywire.com/news/wall-street-sees-worst-carnage-since-2020">series of selloffs</a> characterized the month of June, investment bank Morgan Stanley <a href="https://www.dailywire.com/news/investment-banks-predict-how-much-more-stock-market-could-plummet">forecasted</a> that the index could drop another 15% to 20%.</p>
<p>President <a href="http://dailywire.com/topic/biden-administration">Joe Biden</a>, however, is more optimistic.</p>
<p>“You’ve got serious economists who warn of a recession next year… What should Americans believe?” Associated Press reporter Josh Boak <a href="https://www.dailywire.com/news/biden-claims-recession-not-inevitable-tells-americans-they-shouldnt-believe-economist-warnings">asked</a> Biden last month.</p>
<p>“They shouldn’t believe a warning. They should just say: ‘Let’s see. Let’s see, which is correct.’ And from my perspective, you talked about a recession. First of all, it’s not inevitable,” Biden replied.</p>

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Americans Dip Into Savings As Inflation Soars