Inflation Is Squeezing American Households and Savings Are Taking the Hit

American households are feeling the squeeze as inflation continues to push up the cost of everyday life. New personal consumption expenditures data shows income is finally growing faster than spending, but consumers are still spending more than their inflation-adjusted incomes and drawing down savings to keep up.

In this episode of Everyday Economics, Chris Krug and PhD economist Orphée break down what the latest economic data means for American families — from healthcare and groceries to housing, interest rates and big-ticket purchases.

They also examine how government spending, energy costs, tariffs and higher interest rates are affecting consumers, why housing demand is weakening, and what could happen to the economy heading into the fall and next year.

In this episode:

• Inflation and the rising cost of living

• Americans drawing down savings

• Household income vs. spending

• Housing demand and mortgage-sensitive spending

• Government spending and interest rates

• Energy and transportation costs

• Tariffs and their potential economic impact

• AI investment and economic growth