Bidenomics: 41% of households are in a worse economic situation than a year ago

A survey conducted by the New York Federal Reserve revealed that 41% of American households said they were experiencing a worse economic situation than at the same time last year.

The survey — called Consumer Expectations — also found that nearly 30 percent of respondents expect their finances to be worse off next year. Likewise, its revenue growth was negative, falling 0.3% in August (to 2.9%) compared to July of this year. This is the lowest level perceived since July 2021:

A fractured economy

The discouraging survey results come as Americans see their financial situation weakened for several reasons, including inflation.

High prices have forced many Americans to use their credit cards to cover their basic expenses. This phenomenon was reflected in the record debt that marked the use of cards in the second quarter of this year. According to data from the New York Federal Reserve of New York (FED) the level of debt for the April to June period reached $1.03 trillion(Trillion), an increase of almost 4.6% ($45 billion) over the first quarter of 2023.

An analysis by Mark Zandi, chief economist at Moody's, also showed the situation of Americans' pocketbooks. Zandi revealed that accumulated inflation has caused citizens to spend $ 709 more per month than two years ago, in their expenses for basic goods and services to live.

Savings run out

Another study the San Francisco Federal Reserve released in August indicated that Americans' savings were falling at a rapid pace as the prices of their basic expenses rose.

The analysis exposed that during the pandemic (until June 2021) Americans experienced an "unprecedented" increase in their excess savings. However, households began spending this savings quickly in 2022, generating a loss of about $100 billion per month in withdrawals.

In March 2023, savings reached $2.1 trillion. In the updated estimates, the report revealed that in June, households had less than $190 billion of these surplus savings. The San Francisco Fed predicts that if withdrawals continue at the same pace, excess savings will dry up in the third quarter of 2023 (September):