US Consumers Near Day of Reckoning as Pandemic Cash Stash Shrinks
- Poor households already feeling strain from pinched finances
- Economists divided over whether stresses will spur a recession
Over the past two years, consumers have drawn down the more than $2 trillion in extra savings they accumulated during the pandemic.
Photographer: Juanmonino/E+/Getty Images
US consumers are approaching a reckoning as the excess cash they built up during the pandemic dwindles. How they respond will help determine whether the world’s largest economy can dodge a recession.
Over the past two years, consumers have drawn down the more than $2 trillion in extra savings they accumulated during the pandemic in order to keep spending in the face of sky-high inflation. That’s enabled the economy to push ahead even as the Federal Reserve jacked up interest rates at the fastest pace in four decades.