Peach Tree Times

As the nation spiraled into the grip of the COVID-19 pandemic, lockdowns and stimulus checks enabled households across the United States to build up a large cache of savings.

As the pandemic has eased and lockdowns have been lifted, inflation set in, causing prices to soar forcing many Americans to tap into their pandemic savings. Many people blame President Joe Biden for this reality.

A Wall Street Journal (WSJ) report which cited Moody’s Analytics data, indicated that U.S. households saved $2.7 trillion from the start of the pandemic to the end of 2021, likely the result of lockdowns that left people with fewer places to spend their money along with increased income from a trio of stimulus payments. Just six months later, inflation may be cutting into those savings, with prices increasing 1.2% in the South Region in May.

"The personal saving rate, a measure of how much money people have left over after spending and taxes, reached 5.4% in May," the WSJ reported.

The WSJ report also pointed out that the country’s rate of inflation recently reached a mark not seen in four decades, and with wage gains dropping off, American consumers have been forced to turn to their savings to meet increasing expenses. 

In June, the U.S. Bureau of Labor Statistics (BLS) unveiled 12-month data on the consumer price index, for the year-long period ending in May, with an 8.6% increase in prices, up 0.3% over the previous month and a 40-year high, driven mostly by rising prices in food, shelter, and gasoline. The information for June will be released in the coming weeks, according to the BLS.

Prices for fuel, shelter and food have increased in Southern states, including Georgia, which saw an increase of 1.2% in May, according to the BLS. The consumer price index for all urban consumers rose 9.2% in the south.

Amid inflation, the WSJ cited a Moody’s Analytics report which noted Americans have used an estimated $114 billion of their pandemic cache to date. Jamie Dimon, CEO of JPMorgan, recently said that consumers have a projected six to nine months of savings left.

Amid the rising prices, people are blaming Biden. An Ipsos report noted in June just 37% of Americans approve of his handling of the economic recovery, a figure that has been steady in recent months, but off by 16% from a year ago.

The Ipsos survey also found 28% of Americans approve of the president’s handling of inflation, and 27% approve of his efforts on gasoline prices. Among Democrats 56% approve of his handling of inflation, while 51% approve of his handling of gasoline prices, according to the survey.