Excess Savings during the COVID-19 Pandemic by Aditya Aladangady, David Cho, Laura Feiveson, and Eugenio Pinto published by Board of Governors of the Federal Reserve System (10/2022).
“Over the pandemic, historic levels of government transfers boosted household income while household spending was severely curtailed by social distancing. This led the personal saving rate to soar (Figure 1), and we estimate that U.S. households accumulated about $2.3 trillion in savings in 2020 and through the summer of 2021, above and beyond what they would have saved if income and spending components had grown at recent, pre-pandemic trends. Since late last year, households have decumulated about one-quarter of these excess savings, as the saving rate has dropped below its pre-pandemic trend…”
