Charted: The Decline of Pandemic Savings

Charted: The Decline of Pandemic Savings

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Pandemic savings ran dry months ago, but that hasn’t deterred U.S. consumers from closing their wallets.

While pandemic excess savings hit a peak of $2.1 trillion in August 2021, they have since declined $291.3 billion below levels expected if the pandemic had never happened. This has led personal savings rates to drop to 4.4%, notably lower than the 8.9% historical average, at a time of inflationary pressures and high interest rates.

This graphic shows pandemic-era cumulative excess savings, based on data from the Federal Reserve Bank of San Francisco.

Pandemic-Era Savings Are Now Fully Depleted

In March 2024, pandemic-era savings dried up yet spending continues to march on.

This high rate of spending, coupled with rising wages, have bolstered the U.S. economy. Despite macroeconomic headwinds, America’s GDP growth has surpassed many other advanced countries. However, consumers are increasingly relying on credit cards to fund purchases, and delinquencies are rising at the fastest pace since 2011.

Below, we show cumulative excess savings—the stock of actual savings in the U.S. economy compared to pre-pandemic trends—as U.S. consumers continue spending:

Today, U.S. consumers are saving less and taking on a record $1.2 trillion in credit card debt.

Yet as shoppers are spending on entertainment, travel, and eating out, it is fueling key sectors of the job market. In November, the leisure and healthcare sectors continued to see the strongest employment growth as the U.S. unemployment rate stood at a healthy 4.2%.

Looking ahead, labor market strength and and rising real incomes are projected to continue, and fuel consumer spending into 2025. While higher tariffs could increase inflation and weigh on consumer wallets, Trump tax cuts could support spending.

On the other hand, if employment cools and real incomes fall, it will likely dampen consumption growth into 2025, further exacerbated by dwindling savings and increasingly strained finances.

Learn More on the Voronoi App

To learn more about this topic from a consumer spending perspective, check out this graphic on global consumer spending power by generation.