Have excess pandemic savings run out?

<p>JPMorgan last week made the call that US pandemic savings have finally run out.</p><p>"Excess savings for US households when adjusting for inflation are now fully exhausted from a 2021 high of $2.1 trillion," JPM said.</p><p>Retailers have been highlighting how low-end consumers have cut back and that same cohort was struggling in today's consumer confidence survey. However I think much of the excess savings accumulated in the higher income brackets. Could that consumer also be about to cut back? </p><p>I'd guess they're more sensitive to the economic cycle and newspaper headlines. For that to happen, they might need to see a recession coming and with a whipsaw in that department already this year, they might be skeptical. Does a weak non-farm payroll report change that? Maybe.</p><p>There's also a school of thought that's probably domainant right now that says excess savings don't matter. I'd be humble about that opinion as <a href="https://www.forexlive.com/news/just-when-the-outlook-began-to-improve-for-2023-the-risks-begin-to-crystalize-20230118/" target="_blank" rel="follow">I've long feared </a>we could have a Wile E Coyote moment with the US consumer as pent-up pandemic spending ends.</p>

This article was written by Adam Button at www.forexlive.com.