Americans have More Savings than Before the Pandemic
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Americans have More Savings than Before the Pandemic According to New Report
A recent report from The Washington Post based on data released by JPMorgan Chase Institute finds American savings accounts are up. Despite the challenges posed by inflation, Americans are in a better financial position now compared to before the pandemic. Recent data indicates that bank account balances (i.e., more savings) have risen by nearly 10 to 15% since 2019.
The new data analysis from JPMorgan Chase shows Americans have more money in their bank accounts than before the pandemic, but households across the country are quickly spending that extra cash according to the institute’s analysis of data from 19 million Chase customers’ bank accounts.
Does “more savings” mean Americans still have a cash buffer?
In June 2021, the top-income quartile of Chase customers had a median cash buffer of 43 days. In contrast, the lowest-income quartile had a median cash buffer of 22 days. That’s largely a product of the financial boost many Americans experienced during the Covid pandemic. The boost included stimulus checks and a break from student loan payments, although the latter are restarting later this year. At the same time, Americans weren’t spending as much money on goods and services. At the start of 2023, analysis shows the highest earners had just over a month’s worth of a cash buffer and the lowest earners had around 15 days.
Cash buffers are drying up because families aren’t replenishing their savings when they dip into them. That’s been happening more frequently over the past year as consumers wrestle with high inflation. Consumers are saving 4.6% of their disposable income, according to May’s Personal Consumption Expenditure report from the Bureau of Economic Analysis. At the height of the pandemic, consumers were saving a third of their income.
More Savings in Bank but Spending Quickly
Though Americans have more funds than they did before COVID hit, median account balances have dipped more than 41% from their peak in April 2021, when people collected stimulus checks with nowhere to go spend them, the Chase analysis shows. And people still want to shop—consumer sentiment spiked to an almost two-year high this month. It helps explain why the recession that Wall Street kept warning us about hasn’t materialized, according to the Washington Post.
In comparison, according to the Wall Street Journal, Europeans are getting poorer. Wages have declined, and the fallout from Covid and the war in Ukraine continue to be felt.