Americans have wiped out $3 trillion in savings in the past 3 years, mostly from stimulus checks
The Americans have burned 3 billions of dollars in household savings in less than three years, according to data from the Commerce Department.
Between March 2020 and August 2021, families across America stacked approximately 2.1 billions of cash dollars, mainly recovery checks and pandemic slowdowns. This battery has now disappeared.
In the second quarter of 2024, the savings dropped up to $ 900 billion negative because the expenses did not stop and the debt continued to increase.
The savings rate is also tanking. It increased from 4.1% in February 2025 to 3.9% in March. For reference, before the pandemic, people generally save from 5% to 6% of their income. This gap shows how consumers try and fail – to follow.
Expenses exceed growth while prices increase the economy
March experienced a sharp increase in consumption spending, up 0.7% this month. People rushed to buy cars and trucks to dodge prices for import prices. In February, spending also checked above than what thought before, now 0.5%. It was still not enough to change economists that the economy slows down.
The GDP report for the first quarter supported it. He showed that the US economy contracted 0.3% on an annualized basis. Added imports, weighing on global growth. Justin Anderson, principal economist at Capital Metrics, said: “What we see is that people spend just to stay afloat while the economy offers no real basis.”
The price of personal consumer expenses (PCE) – a metric that the federal reserve uses to follow inflation – closed 2.3% in the twelve months until March. It was down 2.7% in February. The basic PCE, which leaves aside food and energy, remained flat a month. During the year, it increased by 2.6%, after an increase of 3.0% in February.
President Donald Trump's new pricing policies are expected to push even higher prices. Economists say it will probably trigger another point of inflation. Short -term inflation expectations among consumers have just reached their highest levels since 1981.
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