Excess Savings Continue to Trend Lower

  • When we last covered Excess Savings on 12/04/2023, it was at $433.1 billion in September 2023. The chart below outlines the Aggregate Excess Savings in the United States following previous recessions. The dark blue line begins in 2020 and depicts pandemic-era excess savings in the U.S. economy which emerged as a result of pandemic-related fiscal stimulus combined with lower consumer spending. Aggregate Savings peaked at $2.14 trillion in August 2021 and have declined to $110.0 billion in January 2024. 

  • The chart below outlines the U.S. Personal Savings as a Percent of Disposable Income, which was 3.8% as of January 2024. 
  • Excluding 2022, current levels in 2023 were consistent with levels last reported in 2008 (3.9% in September 2008). After the start of COVID, U.S. Personal Savings as a Percent of Disposable Income peaked at 32% in April 2020 and again in March 2021 at 26.1%. 

  • The chart below illustrates the Relationship Between Savings, Loans, and Credit from January 2000 to January 2024. 
  • After peaking in 2020 at $5,976.4 billion, Personal Savings for Americans have returned to historical levels, while Consumer Debt, as measured by Consumer Loans and Revolving Credit, has trended higher in recent years. 
  • As of 1/1/24, Personal Savings declined to $779.3 billion, down from the peak level in 2023 of $1,060 billion on 5/1/23. For perspective, Personal Savings remain above the low levels of 2005 and 2007, which were $128.9 billion on 7/1/05 and $201.8 billion on 11/1/07, respectively. Consumer Loans and Revolving Credit have both increased in recent years. Consumer Loans increased to $1,901.30 billion at 1/1/24 and  Revolving Credit to $1,314.26 billion at 1/1/24, respectively. The last significant increase in Consumer Loans was in 2010 at $1,158.2 billion at 4/1/10.

  • The chart below illustrates Consumer Inflation Expectations in the short-term (1-year) and long-term (5-10 years). Consumer Expectations for higher inflation have fallen for both terms, with 1-year Inflation Expectations at 3.0% in February 2024 and 5–10 year Expectations at 2.9% in February 2024.

  • The University of Michigan Consumer Sentiment survey is outlined in the chart below from June 1980 to February 2024. The latest University of Michigan Consumer Sentiment survey declined to 76.9 in February 2024, down from 79.0 in January 2024.

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