US Savings Rate Falls to 2.6% as 3.8% Inflation Outruns 3.6% Wage Growth

6 articles · Updated · CNBC · May 28

April's 2.6% personal savings rate was down from 3.2% in March and 5.8% a year earlier, marking the lowest level since June 2022, BEA data showed.
Inflation rose 3.8% from a year earlier while average hourly earnings increased 3.6%, leaving paychecks short of rising costs for basics including gas, food, electricity and healthcare.
$4.43-a-gallon gasoline has become a particular strain since the Iran war, adding to pressure on household budgets already stretched by elevated prices.
37% of Americans said they would need credit cards, Buy Now Pay Later or other loans to cover at least some expenses this month, including 35% of households earning $100,000 or more.
Fidelity data showed more workers also tapped retirement savings in the first quarter, with 19.2% carrying outstanding 401(k) loans versus 18.8% a year earlier.

With savings at a crisis low, how long can consumer spending truly power the US economy?

As record debt meets disappearing savings, are American households prepared for the next economic shock?

Will the Federal Reserve be forced to slash interest rates to rescue the debt-laden American consumer?