Get All Access for $5/mo

Americans Aren't Saving Money Right Now — and It's Not Just Because of Inflation Dwindling savings could mean trouble for many Americans as the threat of a recession looms.

By Amanda Breen Edited by Jessica Thomas

Westend61 | Getty Images

Though many Americans' savings accounts gained some extra padding during the Covid-19 pandemic with stimulus checks and fewer opportunities to spend, there's reason to believe those reserves will run dry soon.

Even with the threat of a recession on the horizon, Americans are spending more than they're saving, and it has as much to do with resilient consumer habits as it does inflation, Insider reported.

Related: Facebook Marketplace Scam Costs Michigan Woman Life Savings

According to a report from the Bureau of Economic Analysis, the personal savings rate, or the amount of income Americans' set aside each month, dropped to 2.3% in October.

Americans' dwindling savings can be attributed to inflation in part. Despite the Federal Reserve's efforts to battle inflation by raising interest rates, price pressures remained high in November, CNN reported.

And earlier this year, a survey from the Pew Research Center found that Americans view inflation as the top problem facing the country today.

But strong consumer spending also plays a significant role in decreasing savings. Consumer spending soared ahead of the holiday season, rising 0.5% in October from September — the largest jump since January, The Wall Street Journal reported.

Related: How Generation Z Can Jump-Start Savings (Advice Anyone Can Use)

Americans who haven't set enough money aside will find themselves in a difficult spot if the U.S. does enter a recession next year.

Amanda Breen

Entrepreneur Staff

Senior Features Writer

Amanda Breen is a senior features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Starting a Business

He Started a Business That Surpassed $100 Million in Under 3 Years: 'Consistent Revenue Right Out of the Gate'

Ryan Close, founder and CEO of Bartesian, had run a few small businesses on the side — but none of them excited him as much as the idea for a home cocktail machine.

Franchise

The Top 10 Coffee Franchises in 2024

From a classic cup of joe to a creamy latte, grab your favorite mug and get ready to brew up success with the best coffee franchises.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

'Jaw-Dropping Performance in 2024,' Says a Senior Analyst as Nvidia Reports Earnings

Nvidia reported its highly-anticipated third-quarter earnings on Wednesday.

Marketing

How Small Businesses Can Leverage Dark Social to Drive Word-of-Mouth Marketing

Dark social accounts for 70% of social media shares and is crucial for small businesses. Here's how you can tap into this hidden marketing opportunity.

Business News

'Do You Sell Cars?': Tesla CEO Elon Musk Trolls Jaguar Rebrand on X

The team running Jaguar's X account was working hard on social media this week.