When oh when will they stop saying this

Yes, it’s back, the trope that will never die. The WSJ has another story that people are “spending down their pandemic savings”, as though that didn’t happen months or a year ago.

U.S. consumers continue to burn through their pandemic savings and are taking on more debt as they face high prices on everything from food and housing [to entertainment.]

Marianne Lake, co-chief executive of [JPMorgan Chase] consumer bank, said at a December conference that before the pandemic, the bank’s lowest-income clients had on average 12 days’ worth of cash on hand. Today, that average is around 15 days, meaning consumers are close to spending down money they socked away during the pandemic. “We’re still on that journey, but getting closer to the end,” said Lake.

For many consumers, maintaining their lifestyles while [grappling with inflation and rate increases] means relying more on credit cards and other products. Some are loading up on installment loans offered by [buy now, pay later players] as [grocery bills remain elevated] and mortgage rates [sit at around 7%]

Credit-card spending was up in the third quarter at major banks, including 9% at JPMorgan Chase, the nation’s largest bank, and 15% at[Wells Fargo], [Citigroup]’s credit-card spending was up only 2%, partly because the measure includes store credit cards, which consumers have been [using less] as they favor other forms of credit.

Jeez. How long can “pandemic savings” last? And if it’s that good for folks’ capital formation, perhaps we should do it again?

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