Surging levels of inflation and the COVID-19 pandemic have eaten into Americans’ savings as the average resident has seen their nest egg shrink by $9,000 compared to a year ago, according to a study.
The average amount of money sitting in a personal savings account fell 15% in the last 12 months — from $73,100 in 2021 to $62,086, according to a study by the Milwaukee-based financial services company Northwestern Mutual.
The firm commissioned a survey of 2,381 Americans between Feb. 8 and Feb. 17.
Of those polled, 60% said that the pandemic has been “highly disruptive” to their finances, though nearly half — 48% — said they have been able to adapt to the new circumstances.
“There could be several factors contributing to the drop in savings from last year, ranging from spiking inflation to people spending more as they resume some sense of normalcy in their lives,” Northwestern Mutual chief customer officer Christian Mitchell said.
The uncertain times has forced a growing number of Americans to change their financial habits, according to the study.
Nearly three quarters — 73% — said their financial habits have improved since the onset of the pandemic.
Thirty-five percent of respondents said they’ve been more inclined to reduce spending and living costs while 22% said they have worked to pay down their debts.
Another 19% said that the pandemic has compelled them to increase their investments, while 17% said they regularly revisit financial plans.
Prices across the economy are soaring at their fastest pace in decades as food, gas, airfare, hotel rooms, and car rentals have become substantially more expensive.
Inflation has skyrocketed from a year ago, having soared to 8.3% — near a 40-year high.
The Fed is facing the difficult and high-risk task of curbing high inflation by sharply increasing interest rates without causing a recession.
Widespread doubts about its ability to achieve that goal have rocked the stock market the past two months.
Stocks rose nearly 700 points in morning trading on Monday following seven weeks of declines that nearly ended the bull market that began in March 2020.
The S&P 500 rose 2% as of noon. The Dow Jones Industrial Average rose 693 points, or 2.2% and the Nasdaq rose 1.7%.
Banks made strong gains along with rising bond yields, which they rely on to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 2.82% from 2.77% late Friday. Bank of America rose 5.3%.
Technology stocks also did some heavy lifting. Apple rose 1.7% and Microsoft rose 1.6%. The sector has been choppy over the last few weeks and has prompted many of the market’s recent big swings.
With Post wires
[Written in collaboration with other media outlets with information from the following sources]
