Americans are saving less of their income. <\/p>\n
The personal savings rate was just 2.6% in April, as reported by the Bureau of Economic Analysis<\/a> on Thursday morning. That\u2019s down more than half a percentage point from March and down 1.7 percentage points from the start of this year, and marks the lowest rate since June 2022.<\/a><\/p>\n The reason why, experts said, included inflation remaining strong with gas and grocery prices continuing to rise.<\/p>\n \u201cThis is really reflective of continued impacts of inflation<\/a>,\u201d said Ted Rossman, principal analyst at Bankrate. \u201cPeople are just not saving much at the end of the month.\u201d<\/p>\n Ryan Sweet, chief global economist at Oxford Economics, said the low savings rate makes it harder for households to weather a job loss or a costly car repair.<\/p>\n \u201cThe consumer is essentially running out of that buffer,\u201d he said. \u201cThat safety net is starting to get depleted.\u201d<\/p>\n In many cases, Sweet said that safety net is gone altogether. That means more household debt.<\/p>\n \u201cWe start to get concerned that consumers will turn to using credit cards, which we’ve already seen,\u201d he said.<\/p>\n And that could cause people to fall behind on payments, Sweet said. But even as savings dwindle, consumers \u2014 especially with higher incomes \u2014 have kept on spending.<\/a> Rossman said that hasn\u2019t always been the case.<\/p>\n \u201cNormally, when people are stressed about the economy, they pull back on things,\u201d he said. \u201cThey stop traveling, they stop going out to eat.\u201d<\/p>\n Rossman said that the fact there hasn\u2019t been a pullback on a wide scale could mean consumers think the current spike in oil prices won\u2019t last.<\/p>\n \u201cWe keep hearing, from the president and others, that war\u2019s going to be over soon, gas prices are going to come back down,\u201d he said. \u201cI do wonder if some people are pulling more of the short-term lever about, \u2018OK, I\u2019ll dip into my savings for now,\u2019 but it\u2019s a short-term adjustment they\u2019re willing to make.\u201d<\/p>\n