The consequences of a high-inflation economy are being suffered by US consumers. According to a federal reserve study issued on Friday, US household wealth fell by more than $6.1 trillion in the second quarter, reaching its lowest level in more than a year. According to the data, household net income fell to $143.8 trillion at the end of June from $149.9 trillion in March of this year.
Overall, Americans’ combined wealth has dropped by more than $6.2 trillion from the $150 trillion amount projected for the end of 2021. The reduction was monumental, surpassing the previous record by more than $30 billion set two years ago when the COVID-19 outbreak wrecked havoc in the market during its initial days.
While family income in the United States is falling, household expenditures are reaching new highs. As per reports, the average cost of raising a child in the United States has risen to more than $300,000, owing to sky-high inflation rates. According to a Bloomberg research, the average cost of raising a kid born in 2015 to a middle-income married couple until he or she is 17 years old or in high school is $310,605, or nearly $18,271 per year.
What happened to the US economy?
According to WION, the United States is seeing its greatest economic slump in recent memory. The economy has shrunk for two consecutive quarters, implying that a recession has begun. The July inflation rate was 8.5%, owing primarily to a reduction in gasoline costs. However, when comparing year-on-year figures, the inflation rate was still approaching a 40-year high, with consumers feeling the brunt of it. In June, the number was 9.1%. Furthermore, according to a recent Bloomberg study, there is a 40% risk that the country may enter a recession by next year.
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