For US Savings Accounts, Another Shift Is Unfolding

The dry details from a spate of economic reports and financial surveys add up to changing narrative in regard to American's savings accounts: People piled up unusually large stores of cash during the pandemic, but they're now spending it to cope with inflation. Details:

• The personal saving rate fell to 5.4% in May, below the average of the last 10 years and a far cry from the staggering rate of 34% clocked in April 2020, reports the Wall Street Journal.
• Americans accrued $2.7 trillion in extra savings from the pandemic's start through 2021—thanks to factors such as stimulus checks and an inability to go out and spend money—but they have now spent about $114 billion of that, per the Journal, citing stats from Moody's Analytics.

• Two-thirds of Americans say they are now dipping into their savings accounts because of the rising costs of, well, everything, reports Forbes. Its survey also found that 8% of people have entirely wiped out their savings, 23% have spent a "substantial" portion, and 36% of have spent what they consider to be a small portion.
• Nearly 60% of Americans currently feel uncomfortable with their "emergency" savings fund, up from 46% two years ago, reports MarketWatch, citing a Bankrate survey. It's worst for millennials, with 62% of them worried, compared with 59% of Gen Xers and 51% of baby boomers.
• Broadly speaking, checking account balances are still above where they were in 2019, per the Journal. In fact, the balances of the lowest-income families remain about 65% higher today. The question is how long that will remain the case. “Most households have a cash cushion to navigate through the very high inflation,” says Moody's analyst Mark Zandi. “This is allowing consumers to stay in the game.”

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