Posted on 12/11/2023 12:25:37 PM PST by Hojczyk
JPMorgan estimated previously that excess savings had peaked in August 2021 at $2.1 trillion, boosted by government stimulus checks. That's since been whittled down to below $148 billion, per the firm's calculations as of October.
"Consumers are facing tighter credit conditions and rising rates, wind-down of Covid-era stimulus and relief programs, declining excess savings and liquidity, and multiple years of above average inflation," JPMorgan strategists wrote at the time.
As Bank of America wrote in a recent note, the plight of elder millennials is particularly difficult.
Older millennials — a demographic of Americans born in the 1980s that holds significant influence on the US economy — have had to navigate the 2008 financial crisis in addition to the pandemic during critical working years of their lives.
The two economic storms, as well as mounting childcare costs and sticky inflation, have made it difficult for the sizable cohort to own a house, save for retirement, and comfortably spend money within their means.
JPMorgan notes that, fortunately for now, there is little sign of systemic weakness in housing, though the market remains largely frozen amid high borrowing costs.
(Excerpt) Read more at businessinsider.com ...
You know, living in assisted living with their families, not working, don't own cars or have savings, pretty much useless.
I thought “millennials” were 40 years old and younger. Seems funny to refer to them as “elder.” But then I’m a boomer who doesn’t understand much about the younger generations.
Middle class is 100%. FJB !
People bought as much house as possible. When the taxes and insurance jump it will cause issues. One of them loses their job it will be a problem. Then they can’t sell or rent to cover the debt, they lose the house.
excess savings?????
WTF?
Schools of Economics have a definition of that and a variable in their models for same?
I am referring to under 40 types. I know a few neighbor youths like that, pretty much useless living with their parents.
Too late for me. My business was destroyed by the lockdowns.
Finally found what “excess savings” meant:
1 “Savings beyond what households would have if there had been no pandemic and none of the aforementioned policies had been implemented. In this case, the counterfactual savings would be the prepandemic savings level plus the savings that would have accumulated if savings grew at its prepandemic trend.
2 Savings beyond what households would have chosen to save based on their situations and available information. In other words, the savings accrued because of restrictions on the economy that prevented households from consuming and saving their preferred amounts. In this case, to define counterfactual savings, we consider how households change their savings and consumption behavior as they receive unexpected income. Savings and consumption behavior will also depend on whether people expect additional payments to last (job promotion) or not (one-time bonus). In this case, savings should be considered “excess” only if something prevents individuals from making their preferred choice (for example, a lockdown preventing individuals from consuming the amount of goods and services they would prefer).
These definitions provide different counterfactual savings and consumption paths, or the amount of savings and consumption that would exist under the circumstances provided in either definition. Accordingly, estimates of excess savings and what to expect of accumulated savings as households respond to changes in the economy will vary depending on the definition.”
A difficult, but worthwhile read.
Lay that shit right at the feet of the Bidung administration. The absolutely worst in the history of the USA. I thought Zero was bad, holy crap. You combine their incompetence with the weak will of the GOP and we are in bad shape.
Mean tweets not to them, but to others acting badly.
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