54% of Americans took money out of their savings to pay for food and rent
To make ends meet, 27% of Americans said they had to take money out of savings and more than half, 54%, said they had to they used that money to pay daily expensessuch as food and rent, according to a new survey published in the Country Financial Security Index.
“Inflation has wrecked household budgets in the last two years, and not just when it comes to one-time discretionary spending or special occasions, but also when it comes to to keep up with billssaid Greg McBride, chief financial analyst at Bankrate.com.
The data comes when Americans continue to face higher inflation since the 1980s.
The Labor Department reported this week that the consumer price index rose 0.5% in January, faster than expected, and 6.4% in the last 12 months.
although that is below the 9.1% peak recorded during the summer as of 2022, it is still about three times higher than the pre-pandemic average.
Consumers are increasingly confident in their savings and accumulate credit card debt to pay for your needs.
The personal savings rate plunged in December to 3.4% from 7.5% a year ago, as households reduced their spending amid a cloudy economic outlook, the Commerce Department reported last month.
Millions of Americans put away extra money during the pandemic as a result of multiple stimulus checks, enhanced unemployment benefits and limited spending options, but those savings are fast drying up.
the americans they have spent about 35% of the extra money they accumulated during the pandemic in mid-January, according to an estimate by Goldman Sachs. By the end of the year, the bank projected that households will have spent about 65% of that money.
In the last three months of 2022, credit card balances increased from $61 billion to $986 billion dollars, according to the Federal Reserve Bank of New York Quarterly Household Debt and Credit Report released Thursday.
That surpassed the previous high of $927 billion recorded before the pandemic began.
Meanwhile, total US household debt rose to a record $16.9 trillion during the fourth quarter, an increase of 2.4% over the prior three-month period.
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