US consumers are approaching a reckoning as the excess cash they built up during the pandemic dwindles. How they respond will help determine whether the world’s largest economy can dodge a recession.
Over the past two years, consumers have drawn down the more than $2 trillion in extra savings they accumulated during the pandemic in order to keep spending in the face of sky-high inflation. That’s enabled the economy to push ahead even as the Federal Reserve jacked up interest rates at the fastest pace in four decades.
But as the cash cushion shrinks, consumers are becoming more dependent on their paychecks to maintain their standard of living.
Read more at Bloomberg.com
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