99% of Americans will be financially worse off than they were pre-pandemic by mid-2024, JPMorgan says | Business Insider
In recent news, JPMorgan has delivered a sobering assessment of the financial situation for most Americans. Most people have used the extra savings they accumulated during the COVID-19 pandemic. According to the bank, by mid-2024, it’s expected that nearly everyone, except the top 1% of income earners, will find themselves in a worse financial position than they were in 2019.
This alarming prediction comes from Marko Kolanovic, JPMorgan’s top stock strategist, who points out that 80% of consumers, comprising a substantial portion of the population and driving a significant portion of consumption, have already spent their savings cushions from the lockdown period. Signs of financial distress are emerging, such as credit card and auto loan delinquencies, as well as Chapter 11 filings.
The chart accompanying this report illustrates that, by June 2024, nearly all income groups, except the top 1%, will have lower inflation-adjusted liquid assets compared to March 2020 levels. JPMorgan’s data reveals that the excess savings peaked in August 2021 due to government stimulus checks have significantly dwindled.
Adding to the situation’s complexity, Bank of America noted that elder millennials, born in the 1980s, face particularly tough economic challenges. They’ve had to navigate both the 2008 financial crisis and the pandemic during crucial years of their careers. With mounting childcare costs and persistent inflation, many of them are finding it difficult to own homes, save for retirement, and maintain their spending within their means……….
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How might these financial challenges for most Americans impact the broader economy, businesses, and investments over the next few years?
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When people have financial problems they worsen the economy. Without the money to spend on businesses they will fail, earning less money.
Financial challenges for most Americans can definitely have a ripple effect on the broader economy, businesses, and investments in the next few years. When people are facing financial difficulties, they tend to cut back on spending, which can impact businesses and their profits. This, in turn, can lead to layoffs and a decrease in economic activity.
Financial issues will mean most Americans will focus more on their need rather than their wants, a direct opposition to the culture of Consumerism in the United States. This will cause the economy to fall, and businesses will have to change their route of advertising to make sure they can keep up with the changes in mindset. Investments will most likely be seen as much more riskier, and therefore, might wane as well. The next few years with our current situation will be a tumultuous time.
These financial challenges for most Americans will cause the economy as a whole to greatly decline since consumers will have to cut down on spending. As far as investments go, people would either invest less because they have no disposable income to spend on investments or invest more to make the little money that they have grow. Overall though, America could be in a financial crisis for a while.