Americans have been falling behind financially over the last year. Two reports released Thursday show just how much.
The share of Americans who feel financially healthy declined by a whopping nine percentage points in March from a year ago, according to a J.D. Power 2023 U.S. Retail Banking Satisfaction Study, while the percentage of consumers who feel financially vulnerable increased by eight percentage points.
Add to that a chart from Evercore ISI Research and the picture is even grimmer.
It (below) shows how the excess savings Americans built up during the pandemic continues to shrink, falling to levels similar to the third quarter of 2020.
Still, there are signs the worst could be over as inflation continues to ease and the job market remains robust.
“We have seen a pretty steep decline in financial health in consumers. There’s a lot more financial stress on consumers, and yes, it’s inflation — [loss of] Covid supports plus inflation,” Paul McAdam, senior director of banking at J.D. Power, told Yahoo Finance. “But consumers’ financial health has stabilized these last few months, so that is positive.”
The big reason folks are feeling more financially stressed is due to cash reserve issues, McAdam said. In the J.D. Power survey, fewer Americans reported they had funds to cover six months of expenses and fewer said they had money stashed away for longer-term needs.
The share of bank customers with more than $10,000 in deposit balances at their main bank declined to 28% in March from 44% a year ago, while the percentage with less than $1,000 jumped to 30% from 17% year over year, according to J.D. Power’s findings.
“The savings cushion they had during Covid is long gone,” McAdam said, echoing the Evercore chart, which showed aggregate savings dropping from a high of $2.3 trillion in the third quarter of 2021 to $1.2 trillion now.
Additionally, more Americans told J.D. Power they could not always pay their bills on time and fewer said they had an excellent credit score. That dovetails with recent data showing that consumers are piling on credit card debt — which hit an all-time high in the fourth quarter of last year — as well as missing payments more often.
The J.D. Power survey did find some bright spots. While only 35% of folks felt financially healthy in March, that’s up from 29% who felt that way in November 2022.
“The low point in the last two years,” McAdam said.
Even the decline in deposits of $10,000 or more has a silver lining, according to McAdam. While Americans are spending down that cushion, they are also moving their money around more to capture better yields on deposit accounts. (The survey, which was conducted before the banking crisis unfolded, doesn’t take into account the $120 billion in deposits that left small and mid-sized banks during the turmoil.)
Still, there’s a ways to go to get back to the nearly 50% of people who felt financially healthy three years ago right as the pandemic began. But some of the pieces are in place. Jobs remain abundant and inflation is going the right way.
“Inflation seems to no longer be accelerating," McAdam said, "so that should help that number move up."
Janna is the personal finance editor for Yahoo Finance. Follow her on Twitter @JannaHerron.
Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more
Read the latest financial and business news from Yahoo Finance
Walmart Inc was sued on Thursday by the U.S. Equal Employment Opportunity Commission (EEOC), the agency's second lawsuit this week accusing the largest U.S. retailer of discrimination against workers with disabilities. The EEOC said Walmart illegally demoted Calvin Hagan for missing too much work at a Raleigh, North Carolina store because of seizures caused by his generalized convulsive epilepsy, and then illegally fired him for violating its attendance policy. The lawsuit was filed three days after the EEOC sued Walmart for firing Adrian Tucker, a deli worker in a Statesville, North Carolina store, because she had too many "unauthorized" absences related to her Crohn's disease, an inflammatory bowel condition.
New data from Bank America hints that maybe everything isn't so great with consumers ahead of the spring shopping season.
(Bloomberg) — Lincoln Power LLC, the owner of two Illinois power plants, filed for bankruptcy after its financial strain was exacerbated by nearly $39 million in penalties levied by the biggest US electric-grid operator. Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentUS Stocks Extend Rally as Traders Eye Peak Rates: Markets WrapRead Manhattan DA’s Letter to Republicans Lawmakers on Tr
The White House is urging bank overseers to get stricter with regional lenders, outlining a series of steps it wants in the wake of the Silicon Valley Bank meltdown.
(Bloomberg) — Bitcoin climbed back above levels seen just before the latest US regulatory crackdown as traders set their sights on $30,000 for the first time in more than nine months. Most Read from Bloomberg$52 Billion Chipmaking Plan Is Racing Toward FailureNew Yorkers Are Moving to These Three Florida Cities$335,000 Pay for ‘AI Whisperer’ Jobs Appears in Red-Hot MarketUS Air Force Plans to End Lockheed Hypersonic Weapon ProgramRussia Detains American Journalist in ‘Dark Turn’ for TiesThe lar
Stephen Schwartzman, worth $42 billion and at the head of a firm managing almost $1 trillion, says social media is what doomed the bank.
(Bloomberg) — Charles Schwab Corp.’s worst month in more than 35 years has sparked a debate among analysts as to whether the brokerage giant has been unfairly punished by investors amid growing fears about the US banking sector.Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentUS Stocks Extend Rally as Traders Eye Peak Rates: Markets WrapRead Manhattan DA’s Letter to Republicans Lawmaker
With a yield of 9.62%, the recently expired Series I bond was understandably popular. With interest rates rising, bond funds are down this year and banks continue to offer miserly rates on deposit accounts. So it's no wonder that a … Continue reading → The post It Pays to Procrastinate: The New 6.89% I bonds Will Beat the Old 9.62% Bonds in Just 4 Years appeared first on SmartAsset Blog.
The satellite deployment startup founded by Branson is letting go of the bulk of its staff, citing an “inability to secure meaningful funding.”
Check out the CDs that made our top 10 list based on their APY, minimum opening deposit, compounding frequency, and customer service.
The Dow Jones rose Friday after key inflation data, with the release of the PCE price index, the Fed's preferred measure of inflation.
The Baby Boomer generation is reaching retirement age in record numbers. With more Boomers retiring on a daily basis, it helps to understand how prepared they are to leave their jobs for good. In this article, we’ll discuss the average … Continue reading → The post Average Retirement Savings for Baby Boomers appeared first on SmartAsset Blog.
An annuity can be an appealing option to build your retirement nest egg. Adding guaranteed retirement income to your retirement can give you financial stability. But the exact amount that you'll get from an annuity each month will vary. Let's … Continue reading → The post How Much Does a $200,000 Annuity Pay Per Month? appeared first on SmartAsset Blog.
For older Americans, living off the interest and returns of your retirement account is how retirement is structured. The goal is that by the time you hit your late 60s you will ideally have enough saved up to coast indefinitely. … Continue reading → The post How Much Interest Does $2 Million Pay Monthly? appeared first on SmartAsset Blog.
Investors looking for alpha in an uncertain market environment could do worse than following in the footsteps of legendary stock pickers and probably none can match Warren Buffet’s reputation. Not for nothing the “Oracle of Omaha” is considered one of the all-time greats and for nearly 60 years, between 1965 and 2022, his Berkshire Hathaway firm’s returns have doubled those of the S&P 500. So, it’s definitely worth nosing through Buffett’s portfolio to see which stocks he currently holds. And wh
Here’s how to earn a six-figure income and pay no income taxes on it – totally legally.
(Bloomberg) — A Nomura Holdings Inc. strategist is warning that investors are overlooking a crucial clue as they grapple with the path of US inflation and the Federal Reserve’s response. Most Read from BloombergTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentWorld’s Top-Rated Airport Sees Immigration System RestoredHow King Charles Got Thrown Into Disney’s Fight With Florida Governor DeSantisTrump to Be Arraigned Next Week After Historic IndictmentStocks Rally as Traders Eye Peak Ra
Americans spend decades saving for retirement, never quite sure how much is enough or what sort of life that money will ultimately buy. To benchmark your retirement plans—including your savings and spending and how you spend your time—one place to start is by looking at how your numbers stack up against Americans overall. The biggest source of retirement income for many Americans is the nest egg built up during their careers.
The biggest cigarette company in the U.S. acknowledges that it has to move toward smokeless products. But to hold its shareholder base, it also knows it has to grow an already rich dividend.
Troubled regional lenders will starve indebted businesses and households of credit, trigger a hard landing, and turn a liquidity crisis into a balance sheet crisis, warns the noted economist.
