Americans’ savings rate falls to lowest level since 2022 as inflation outpaces paychecks
Americans' savings rate has fallen to its lowest level since 2022, primarily due to rising inflation outpacing wage growth. Essential costs, including groceries and utilities, have significantly increased, with gasoline prices particularly affecting consumers. Experts warn that while many households still have cash, they may need to tighten their budgets later this year as tax refunds are exhausted.
- ▪The national average gasoline price reached $4.43 a gallon as of Thursday, according to AAA data.
- ▪Inflation rose 3.8% in April from a year earlier, marking the highest level since May 2023.
- ▪Average hourly earnings increased by 3.6% from the previous year, but this growth is lagging behind inflation.
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The latest savings decline comes as Americans continue to deal with elevated prices on a range of essentials like groceries and utilities. Gasoline has been a particular pain point since the start of the Iran war. The national average at $4.43 a gallon as of Thursday, according to AAA data."Even with tax cuts, paychecks aren't keeping up with inflation right now," said Long. "It's more than just high gas prices. It's rising electricity, healthcare and food prices. These are the basics that people must pay. It's harder to skimp on these items."Inflation rose 3.8% in April from a year earlier, according to the Bureau of Labor Statistics — the highest level since May 2023.
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