By 2024, most Americans will be worse off financially than they were before the pandemic began.

JPMorgan analysts are forecasting that by June 2024, the vast majority of Americans will have less money than they did before the onset of the COVID-19 pandemic. According to the research note, all but the wealthiest 1% have exhausted their savings accumulated over the past year.

The government has been providing generous assistance to Americans, including multiple stimulus checks and programs such as the Paycheck Protection Program, which has provided businesses with much needed funds to stay afloat. Many individuals were also able to work from home, leading to a decrease in transportation and food costs. Additionally, basic guaranteed income programs have gained traction across the country.

However, JPMorgan Market Strategist Marko Kolanovic, who helped draft the note, said that most Americans have burned through their savings. This is due to the rising costs of credit card bills, auto loan repayments, gas, groceries, rent, and public transportation. Kolanovic noted that although inflation has benefitted corporate earnings, as companies were able to sell fewer units at higher prices or by cost-cutting, the forecasted decline in inflation and economic activity in 2024 could cause investors to worry or panic.

Kolanovic also mentioned that a recession could worsen the situation in 2024, which is also an election year. A recession leading to job losses and depleted savings could have a major impact on the re-election prospects of President Joe Biden and the Democratic Party. This echoes the example of how Donald Trump’s failed re-election bid was largely attributed to the pandemic.

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