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There’s an interesting divergence developing between Wall Street and Main Street, with trouble brewing for the lowest income Americans.

Did you know inflation-adjusted savings for the bottom 60% of earners has declined steadily since the start of 2021? This group of the lowest income earning Americans now has less saved than they did before the pandemic started.

“All of those excess savings that had been accumulated during the 2020-21 timeframe have been spent,” explains Josh Steiner in this clip from The Macro Show. “The trend continues to be that of moving lower. Obviously, that’s really the area of the economy getting squeezed the hardest.”

So far, a resilient labor market has helped offset these losses, but Steiner doesn’t expect that to continue for long.

“When the labor market does worsen at an accelerating rate, you’re going to have a collision of these two dynamics: worsening labor combined with significant drawdown in savings,” he adds. “Those two things are not going to be good when they collide.”

Watch the full clip above.

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