Americans have been slashing their spending this year. According to the Invest in You Spending Survey released on Monday, 54% of participants described themselves as savers. The national survey of 2,800 Americans was conducted by CNBC and Acorns in partnership with SurveyMonkey.
These results are good news, right? Saving contributes to financial stability and allows people to invest in their futures. However, the cause for this rise in savings might not be good for investors.
Many savers seem to be thinking about what’s to come in the near future. According to Sheila Bair, former FDIC chair and member of CNBC Financial Wellness Advisory Council, many people are preparing for what-ifs. These what-ifs could be positive or negative – maybe the stock market will thrive, or perhaps a recession is on the way. Today, Americans are saving in fear of recession and job loss.
There have been many signs pointing to a slowdown in economic growth and a rising possibility of a recession. Though the unemployment rate has been stable, job creation was lackluster in the month of May. A measly 75,000 new jobs were added, compared to an expected 180,000 jobs. The largest percentage of survey respondents who said they’ve started to save more and spend less claimed they did so because of job loss. In fact, the number of Americans filing for unemployment benefits rose more than expected last week.