Hey there! Is your bank account balance looking a bit slim these days? If you nodded your head just now, don’t worry, you’re in good company. Seems like our bank cushions across America are flattening faster than a popped inflatable on a cactus. I mean, the last time we hit such rock bottom was three years ago.
GREEN BATTERED, ACCOUNTS TATTERED
Our trend of “revenge spending”[/hotel-prices-up-2023-travel/] (a.k.a. “lockdown shopping therapy”) is one piece of the big picture. But if you ask the number-crunchers, they’ll tell you there’s quite a bigger beast in play. A fresh out of the oven analysis[https://www.jpmorganchase.com/institute/research/household-income-spending/household-pulse-cash-balances-through-March-2023#finding-1] from JPMorgan Chase is pointing its accusatory finger at good ol’ pandemic stimulus payments and tax benefits that are apparently waving us bye-bye.
And then we have our relentless inflation[/inflation-june-2023-rent-insurance/] that has us still holding a losing ticket since Spring 2020.
The Economic Impact Payments, you know those thingies we fondly called stimulus checks[/who-got-stimulus-checks-eligibility-report/], have spent their breath. Hindsight chews on this reality, as we notice our March 2023 average bank account balance is hanging barely 10-15% above what it was back in 2019.
ARE WE REALLY ON THIN ICE?
No alarm bells ringing yet? The current balances might seem okay-ish compared to pre-pandemic times, but let’s do some digging. Allow me to take you for a spin back to the first half of 2022, where we were skipping away with 20-30% above 2019 figures. Now, that, my friend, is a stark difference. So yes, I think it’s safe to say our finance floaty is sadly losing air.
Picture this: the top quartile of our income elevation only had a decent $10,700 not so long ago (April 2022). Yet, we’re now grinding ourselves down to a meek $9,000. Let’s not even get started on those in the quarter-income bracket. Faced with a steep fall from $1,400 last year to a paltry $1,300 now, it’s quite the reality check.
This pretty much earns a Guinness record for the balance hibernation pits as the lowest JPMorgan Chase has noticed since April 2020.
WHEN STIMULUS RUNS DRY
Why this budgetary bungee jump, you ask? Our good friends at JPMorgan Chase have found a red string straight from dipping balances to the quietus of our pandemic relief moves.
COVID-19 stimulus checks[/when-third-stimulus-check-sent-out/]- the trio of them- were our account’s knights in shining armor, no matter the income group. The 2021 frolics of the child tax credit[/child-tax-credit-sign-up-deadline/] were another ray of financial sunshine. Oh come the sunset of government helping hands though, and we see the growth pace whimpering down.
Show me the (less) Money!
The report found that the pandemic relief efforts put the most dough in the pockets of Black and Hispanic households, if we talk percentages. Although their median balances started lower than those of white and Asian Americans pre-pandemic, the revenue rise for these communities painted a brighter picture. Alas, the financial uplift disappeared faster once the supportive measures were pulled.
And then we have inflation[/inflation-hitting-middle-class-hard/] buzzing in our heads. JP Morgan Chase had to tweak its evaluation with Consumer Price Index (CPI) data to actually truth-dive into the cash waves. Long story short: Apt blame for our balance hibernation rests with our new arch-nemesis: inflation.
Extra, Extra, Read More About It!
Want to dig deeper? Check out these reads:
- Rejection Rates for Credit Cards, Auto Loans and More Hit Historic Highs[/credit-card-rejection-rates-high/]
- 7 Clever Tricks to Polish That Credit Score [/7-ways-to-improve-credit-score/]
- IRS Finally Locking Horns with Wealthy Tax Rebels[/irs-crackdown-wealthy-taxpayers/]
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