The Sconi

Since the onset of the COVID-19 pandemic, lockdowns and stimulus checks enabled U.S. households to build up a large amount of extra savings. However, with inflation causing prices to soar across the board, Americans are reportedly being forced to tap into their pandemic savings to keep up with rising costs and, if June poll results are any indication, they are placing the blame on the president for inflation.  

U.S. households squirreled away $2.7 trillion in savings from the start of the pandemic to the end of last year, likely the result of lockdowns that left people without anywhere to spend money and increased incomes from a trio of stimulus payments, according to a Wall Street Journal report citing Moody’s Analytics. Less than a year later, inflation may be eating into savings, with prices increasing 1.5% in the Midwest 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 Wall Street Journal reported. 

Moreover, the publication noted that the nation’s rate of inflation recently reached a mark not seen in decades and, with wage gains dropping off, Americans have been forced to turn to their nest eggs to meet expenses. 

Just last month, the U.S. Bureau of Labor Statistics (BLS) released 12-month data on the consumer price index, for the year-long period ending in May, with an 8.6% increase in prices. That is up 0.3% over the previous month and a 40-year high. It's 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.  

Higher prices for food, shelter and fuel has driven prices up in Midwestern states, including Wisconsin, which saw a typical increase of 1.5% in May, according to the BLS. Meanwhile the consumer price index rose 8.8% in the region, according to the BLS. 

The personal savings rates hit 5.4% in May, according to the Wall Street Journal. This gauges how much money Americans have left after taxes and spending. The rate in May is below the average of the last 10 years and well off the 34% mark in April 2020, during the first months of the pandemic, according to the Bureau of Economic Analysis (BEA).

The publication cited a Moody’s Analytics report which noted that Americans have used an estimated $114 billion of their pandemic cache to date amid inflation. Last month Jamie Dimon, CEO of J.P. Morgan & Co., told the newspaper that consumers still had from six to nine months of savings to tap. 

Moreover, people are placing blame on President Joe Biden, with an Ipsos report noting in June that 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 that 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.