US Savings Rate Falls to 2.6% as Inflation Outpaces Wages

3 articles · Updated · Reuters · Jun 1

April's 2.6% personal savings rate marked a four-year low, halving from a year earlier and leaving U.S. households with one of their thinnest buffers since records began in the 1950s.
Inflation is now running ahead of wage growth for the first time in three years, with higher energy costs pushing consumers to draw down savings to keep spending.
Debt stress is already rising: 90-day-plus auto loan delinquencies hit a record 5.6% in the first quarter, while credit card delinquencies reached 13.1%, the highest since 2011.
Corporate America is telling a different story, with first-quarter profits at 18.4% of output—near record highs—while stock gains help wealthier households keep overall consumption and GDP growth afloat.
That split economy could become a political problem for Donald Trump, as cost-of-living pressures weigh on voters even if headline growth remains near 2%.

Sources

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Reuters2d ago

US Consumers' Savings Rate Hits Four-Year Low Amid Inflation and Spending Pressures

The Wall Street Journal2d ago

Energy Costs Continue to Feed Inflation, Fed's Beige Book Shows - WSJ

ColoradoBiz10h ago

Fed survey shows inflation pressures squeeze US consumers and businesses

4 Sources

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US Personal Savings Rate Hits 65-Year Low: Causes, Consequences, and the Road to Recovery

Overview

Personal savings in the United States have dropped to a 65-year low as households face persistent economic pressures. Rising costs for essentials like energy, food, housing, and transportation, combined with stagnant wage growth, have created a challenging environment for family budgets. Even though headline inflation has slightly moderated, the prices of critical items remain high, forcing many Americans to spend more than their disposable income allows. As a result, people are drawing down their savings to maintain their standard of living, highlighting the growing financial strain on households across the country.

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