MacroMavens President Stephanie Pomboy discusses the economy, the impact of inflation on consumers, and her expectations for fourth quarter GDP.
Chronic inflation is hampering the ability of millions of Americans to prepare for their financial future, according to new research released by Allianz Life Insurance.
According to research by Allianz Life Insurance Company of North America, American households are drawing down their retirement savings, borrowing money, and reducing the amount they have set aside for the future in order to maintain their current finances.
Nearly 7 in 10 respondents said they are not contributing much to savings due to rising prices for everyday items, while 51% of Americans say they are taking on more credit card debt to pay for necessities. The answer was yes.
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A woman shops for groceries at a supermarket in Monterey Park, California, on October 19, 2022. (Frederick J. Brown/via AFP/Getty Images)
In addition, nearly 42% of households reported dipping into their retirement savings due to inflation, a “worrying” sign for long-term financial stability, the report said. There is.
“Rising costs of living are straining U.S. budgets,” said Kelly Lavigne, vice president of consumer insights at Allianz Life Insurance. “Just because inflation has slowed doesn’t mean prices have gone down. In the short term, it may be wise to postpone big purchases to continue saving for the future and avoid taking on new debt. not.”
The study comes as Americans continue to face high inflation that is rapidly eroding their purchasing power.
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The Department of Labor reported last month that: consumer price indexA broad measure of prices for daily necessities, including gasoline, groceries and rent, rose 0.4% in February from the previous month. Prices increased by 3.2% compared to the same period last year.
Both of these figures exceeded the 0.3% month-on-month rise recorded in January and the 3.1% headline increase, highlighting the difficulty in containing price pressures within the economy.
Customers shop at a supermarket on September 13, 2023 in Foster City, California. (Li Jianguo/Via Xinhua/Getty Images)
caused by high inflation severe financial pressure Most American households are being forced to pay more for everyday necessities like food and rent. The burden falls disproportionately on low-income Americans, whose already maxed-out paychecks are heavily affected by price fluctuations.
As spending on everyday items increases, Americans are on fire More and more people are dipping into their savings and turning to credit cards to cover basic expenses. Credit card debt soared to an all-time high at the end of December, according to recent data from the New York Fed.
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But recent signs that progress is stalling have many Americans still worried that the worst of inflation could be the case. Some 68% expect inflation to worsen over the next 12 months, but this is down from 74% at the end of 2024. In contrast, 37% of respondents said they felt “good” about the direction of inflation. I headed to
“Inflation isn’t going anywhere. The cost of living always goes up over time. The only question is how much and how fast does it go up?” Lavigne said.
