Tag Archives: savings

US inflation affects 100% of the populous as many Americans deplete their Savings Accounts, rely on Credit Cards to cover increasing cost of living

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • The US consumer is starting to freak out
  • The flush savings accounts and cheap credit that helped keep Americans spending at high rates since 2020 are disappearing
  • Retail purchases have fallen in three of the past four months. Spending on services, including rent, haircuts and the bulk of bills, was flat in December, after adjusting for inflation, the worst monthly reading in nearly a year.
  • Sales of existing homes in the U.S. fell last year to their lowest level since 2014 as mortgage rates rose. The auto industry posted its worst sales year in more than a decade.
  • One factor making forecasting more difficult: While unemployment is trending at a half-century low, big companies including Amazon.com Inc., Goldman Sachs Group Inc., and Microsoft Corp. have begun to cut jobs.
  • Also weighing on many consumers: The rapid increase in rates in the past year, tied to Fed tightening, has pushed the cost of all types of debt higher.
  • Mortgage rates reached a 20-year high last fall. Some 57% of consumers were concerned about making housing payments in the fourth quarter
  • Additionally, tens of millions of Americans are set to start or resume making payments on student loans later this year, after the Supreme Court rules on President Biden’s student-debt cancellation plan. Payments have been frozen since March 2020, and are scheduled to begin again 60 days after litigation is resolved or the program is implemented.
  • Many taxpayers will get smaller refunds when they file their returns in the coming months because Congress didn’t extend the breaks put in place at the height of the pandemic.
  • S. factories, shippers and importers are pulling back, a sign they anticipate less demand from Americans in the months ahead.
  • Inbound volumes at the ports of Los Angeles and Long Beach in California were down 20.1% in December from a year earlier, and have been behind 2019 levels since August.

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Argentina’s Inflation will reach 60% this year. Locals say you’re lucky if you have two to three jobs

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Argentina inflation surges to decades-high in March, sapping spending power
  • Argentina’s monthly inflation rate soared to 6.7% in March, the government said on Wednesday, far above forecasts and the highest level in two decades as spiraling food and fuel prices dent the value of salaries and savings.
  • Argentina has been battling with high inflation for years with little success. That has been worsened as global commodities prices have climbed over the last year, exacerbated recently by the war in Ukraine.
  • Experts predict Argentina’s inflation will reach nearly 60% this year. That takes a steep toll on Argentines, almost 40% of whom already live in poverty even as a rebound in growth from the coronavirus pandemic has helped reduce that number.
  • “We have no choice. If we are lucky, we can have two or even three jobs. And not even then do we make ends meet because one day products have a certain price and the next day it’s a different one. That really kills people throughout the country.”

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Low-income U.S. households are spending savings quicker than high earners: study

By Jonnelle Marte

(Reuters) – U.S. households across the board built up savings during the pandemic, but low-income households are burning through their cash more quickly than higher-income families and could be out of savings soon if more aid is not delivered, according to a study released on Wednesday.

By the end of October, the median low-income family spent 64% of the extra cash they accumulated this year compared with last year, leaving them with about $236 in extra cash, according to a report released Wednesday by the JPMorgan Chase Institute. In contrast, higher-income households lost just 38% of the cash cushion built up this year, and had a median $810 in savings, the study found.

“If these trends continue, we would expect low-income families to deplete their account balance gains sooner than their high-earning counterparts,” researchers noted in the report.

The JPMorgan Chase study showed that cash balances appeared steady on average after rising earlier this year, in line with a separate report released by the Federal Reserve last week showing that balances in cash, checking accounts and savings deposits rose over the three months ending in September to a record $13.4 trillion.

But a look at cash balances for the median household – which is not affected as much by households with abnormally high, or unusually low, account balances – showed a more volatile experience.

The median cash balance for checking account holders studied by JPMorgan Chase rose in the spring when the government distributed cash payments to most households – and balances have been declining since.

Those households could experience another substantial drop in income and spending at the end of the year when unemployment benefits are set to expire for millions of workers participating in pandemic programs created by the CARES Act, the researchers said.

Consumers have previously cut spending on non-durable goods by 12% after losing unemployment benefits, and those receiving jobless benefits reduced spending by 14% over the summer after a $600 weekly supplement to unemployment benefits expired at the end of July, the study noted.

Lawmakers have yet to reach an agreement on another round of aid. Some COVID-19 relief measures could be attached to a critical spending measure that must be passed by Friday to avoid a federal government shutdown.

(Reporting by Jonnelle Marte in New York; Editing by Matthew Lewis)