RICH GET RICHER: Americans in Worse Shape Now Than in 2019
The wealthiest 20 percent of households have savings 8 percent greater than before COVID
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Four in five U.S. households see themselves as in a worse financial state now than before the COVID era, according to a U.S. Federal Reserve survey.
The bottom 80 percent of households by income have smaller bank accounts, have largely depleted their excess savings accumulated during the COVID War, and report having fewer liquid assets now than in March 2020.
The depletion of savings was “rapid,” according to Bloomberg’s analysis of Fed data, and “particularly stark” among lower-income groups.
In contrast, the wealthiest 20 percent of households have savings 8 percent greater than before COVID arrived. The poorest 40 percent have 8 percent less in savings. The remaining 40 percent also reported somewhat smaller savings reserves.
The excess savings that households amassed during the COVID period will be completely exhausted by the end of this year, according to the Federal Reserve Bank of San Francisco.
In this year’s second quarter, overall net worth of U.S. households spiked by about $5.5 trillion, Fed figures show. The gains were attributable mostly to increases in home values and stock portfolios and disproportionately benefited wealthy households, which are more likely to own stocks, Bloomberg noted.
An array of government stimulus measures from 2020 into 2022 guaranteed a rapid U.S. post-COVID economic recovery. However, without those gifts and grants, “the long-term sustainability of a recovery is becoming uncertain,” Bloomberg said, “especially for those not in the top income bracket.”