5 economic signals suggest U.S. consumers are feeling the strain American consumers are showing signs of financial strain due to high inflation, with real after-tax income declining and credit card delinquencies reaching their highest level since 2011. The personal savings rate has slid to a 22-year low, and more individuals are taking loans or hardship withdrawals from their 401(k)s. As gas prices surge, lower- and middle-income households are cutting back on consumption, impacting overall spending.

• Consumer spending, which drives 70% of the U.S. economy, is showing signs of strain amid high inflation.
• Real after-tax household income has fallen over the past year, a drop not seen since the Great Recession, excluding pandemic-era distortions.
• Credit card delinquencies are at their highest level since 2011, indicating increased difficulty in meeting financial obligations.
• The personal savings rate has fallen to a 22-year low, with tax refunds providing temporary relief that is expected to run out.
• More Americans are borrowing from or making hardship withdrawals from their 401(k)s due to financial difficulties.
• Lower- and middle-income households are reducing gas consumption, and some retailers are observing a decrease in fuel purchases per customer.