OHIO — Financially, the pandemic was a good time for some Americans as they could save money. Now, what was saved from the beginning of the pandemic until the end of 2021 has dwindled away.
Dr. Jeff Guernsey, a professor of finance at Cedarville University, said at the height of the pandemic, “People were receiving funds from the federal government, multiple stimulus checks. There were extended child tax credit payments. And quite frankly, people weren’t spending nearly as much money as they were before.”
Guernsey said, the savings rate ballooned to about 30% of people’s income. The reality is that it would not be sustainable.
When the country shifted gradually back to pre-pandemic norms, those savings dwindled away as people spent again and use credit cards more.
“The savings divided by income is down to more historical levels,” Guernsey said.
Now, inflation is affecting everyone, “We may be tipping towards a recession where the economy is actually slowing down a little bit. What’s a bit unusual about that is that the job market is still really, really robust.”
