Most Americans have spent their savings during the COVID-19 pandemic and will soon be worse off than they were before the coronavirus, investment bank JPMorgan Chase warns in a new report cited by Markets Insider.

A report by Marko Kolanovic, JPMorgan’s chief stock market strategist, said that 80 percent of U.S. consumers, who account for nearly two-thirds of total U.S. consumption, have already used up all their potential savings during the lockdown.

“It is likely that only the richest 1% of consumers will be better off by income than before the pandemic,” the analyst notes, adding that the situation will worsen by the middle of next year.

As an example, Kolanovich in the report cited an increase in the number of delays in the payment of loans obtained with the help of credit cards, as well as a recorded situation in the case of loans for the purchase of a car, as well as an increase in requests from Americans to enter bankruptcy.

Americans’ savings have plummeted

JPMorgan, Wall Street’s biggest investment bank, previously estimated that Americans’ additional savings peaked in August 2021 at $2.1 trillion amid government measures that are holding back the economy and the fact that people are staying at home with limited opportunities to spend money. .

But the investment bank’s most recent calculations in October showed that amount had since shrunk to less than $148 billion.

The situation is paradoxical, as the US economy has defied all expectations, avoiding a recession this year and achieving significant growth in gross domestic product in 2023. The US stock market has also had a great performance in 2023 with impressive growth in some areas.

But the data appears to suggest that ordinary Americans have largely not felt that increase amid persistent inflation and rising home prices during the pandemic.