U.S. consumers are feeling the effects of inflation that is broad-based and at a 40-year high, and now they are responding to surging prices by saving less, using credit more, and modifying their lifestyle choices, new data show.
According to the Bureau of Economic Analysis (BEA), the household savings rate tumbled, to 5.1 percent in June, down from 5.4 percent in May. This was the lowest level since August 2009, when it was 4.9 percent.
Federal Reserve officials and market experts have routinely noted that consumers had socked away an estimated $2 trillion during the coronavirus pandemic. With the economy under lockdown, it was easier for households to save, especially if they remained employed, worked from home, and received thousands of dollars in stimulus checks from the federal government. …
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