Americans' personal saving rate — the share of disposable income left over after spending — dropped to a rock-bottom 2.3% in October. There's been just one instance of a lower saving rate in over 60 years.
Roughly $1.5 trillion in accumulated savings will run out in the middle of next year, JPMorgan Chase CEO Jamie Dimon“When you’re looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about," Dimon said.: It marks a stunning reversal from the depths of the pandemic, when the saving rate skyrocketed to a record high.twice
that throughout the first two years of the pandemic, a period that included three rounds of fiscal aid and — thanks to the global shutdown — limited places to spend.estimated that households accumulated roughly $2.3 trillion in savings through last summer. That stockpile started declining at the end of last year; as of the second quarter, it stood at $1.7 trillion.
The biggest contributor to excess savings for the richest households was the lockdown-driven reduction in spending, the Fed found. For the bottom half of the income distribution, the fiscal transfers were the primary contributor.What they're saying : Economists have a slew of guesses about when those savings will be exhausted — another important variable for how the economy develops.
Analysts at Bank of America found one excess savings estimate — around $930 billion — would last another eight months based on recent trends. But their alternate estimate suggests excess savings could last for up to two more years.
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