Keystone Today

Since the birth of COVID-19, lockdowns and stimulus checks have allowed U.S. households to establish higher savings, however, since inflation has caused prices to skyrocket, reports have submerged that Americans are now forced to withdraw from savings to remain afloat.

As of June poll results, most Americans blame President Biden for inflation and in the Northeast Region, prices increased 0.9% in May, according to the Wall Street Journal.

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

According to Moody’s Analytics, U.S. households saved up $2.7 trillion combined from the start of the Coronavirus until the end of 2021, the Wall Street Journal reports. This extra cash cushion is estimated to be a reflection of pandemic lockdowns which kept people at home with fewer opportunities to spend money while boosting income from three stimulus checks.

The country's inflation rate reached its highest point in decades, as wage gains fell behind, causing Americans to turn to savings stash to cover costs, the WSJ reports.

On June 10, the Bureau of Labor Statistics (BLS) released the annual Consumer Price Index (CPI) ending May 2022. The data revealed an 8.6% all items annual increase, representing a 0.3% climb from the month before and a new 40 year high. The biggest factors were surges in indexes for shelter, gasoline and food. The BLS CPI data for the month of June will be released July 13.

The WSJ reports that the personal savings rate measures how much money individuals have left over after spending and taxes, hit 5.4% in May. This is reportedly below the average of the last 10 years and well below the April 2020 record of 34%, according to the Bureau of Economic Analysis. According to Moody’s Analytics, American families have tapped into approximately $114 billion of their pandemic savings so far.

JPMorgan Chief Executive Jamie Dimon in June told the Journal that U.S. consumers still had between 6 and 9 months of spending power remaining in their bank accounts.

Ipsos reports in June that only 37% of Americans approve of Biden’s handling of the post-pandemic recovery. This rating is in line with views from the past few months, but represents a 3% decline from April, when the approval rating was 40% It also represents a 16-percentage point decline from nearly a year ago, when 53% of Americans said they approved in July 2021.

Roughly a quarter of Americans approve of Biden’s handling of both inflation (28%) and gas prices (27%), per Ipsos. Among Democrats specifically, approval is not high, as left-wing voters gave Biden a 56% approval rating on his handling of inflation, and 51% approval concerning gas prices.

Influenced by higher prices for energy and food, Northeast states such as Pennsylvania saw an average 0.9% increase in prices during May. Over the last 12 months, the CPI-U rose 7.5% in the region, according to data from the U.S. Bureau of Labor Statistics.