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Consumer Financial Health: Difference between revisions
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* The saving rate stands at 4.7%. The saving rate has come down significantly since the pandemic and, is currently even below the pre-pandemic levels of 8%. <ref>https://fred.stlouisfed.org/series/PSAVERT</ref> | * The saving rate stands at 4.7%. The saving rate has come down significantly since the pandemic and, is currently even below the pre-pandemic levels of 8%. <ref>https://fred.stlouisfed.org/series/PSAVERT</ref> | ||
'''Excess Savings''' | |||
[[File:Excess savings.PNG|thumb|https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-us.pdf]] | |||
The Federal Reserve estimated that through the summer of 2021, U.S. households accumulated $2.3 trillion in excess pandemic savings. According to the Federal Reserves, they stood at $1.7 Trillion as of mid-2022, and recent reports from JPM estimate excess savings are $900 billion at the beginning of 2023. | |||
<ref>https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-us.pdf</ref> | |||
According to BofA, lower-income households are expected to deplete their savings by the end of 2023, while upper-income households may exhaust their savings by the end of 2024 to 2025. <ref>file:///C:/Users/maga-/Downloads/hitting-the-buffers-october-2022.pdf</ref> | |||
The primary driver of the excess savings for households in the top quartile has been their foregone consumption. In contrast, the primary driver of excess savings for the bottom half of the income distribution was the roughly $1.5 trillion in fiscal transfers received through the end of 2021.<ref name=":1">https://www.federalreserve.gov/econres/notes/feds-notes/excess-savings-during-the-covid-19-pandemic-20221021.html#:~:text=We%20estimate%20that%20households%20in,stimulus%20in%202020%20and%202021.</ref> We can expect additional pressure on the lower income households since these fiscal transfers are no longer active. | |||
{| class="wikitable" | |||
!Quarter Date | |||
!Bottom Quartile | |||
!Second Quartile | |||
!Third Quartile | |||
!Top Quartile<ref name=":1" /> | |||
|- | |||
!2020: Q1 | |||
|10.291 | |||
|16.642 | |||
|25.170 | |||
|45.470 | |||
|- | |||
!2020: Q2 | |||
|115.610 | |||
|157.753 | |||
|275.184 | |||
|401.873 | |||
|- | |||
!2020: Q3 | |||
|113.590 | |||
|175.001 | |||
|368.898 | |||
|656.234 | |||
|- | |||
!2020: Q4 | |||
|64.178 | |||
|164.663 | |||
|436.376 | |||
|871.172 | |||
|- | |||
!2021: Q1 | |||
|167.467 | |||
|275.347 | |||
|583.372 | |||
|1124.104 | |||
|- | |||
!2021: Q2 | |||
|170.190 | |||
|275.762 | |||
|598.222 | |||
|1209.464 | |||
|- | |||
!2021: Q3 | |||
|170.636 | |||
|290.802 | |||
|612.837 | |||
|1197.149 | |||
|- | |||
!2021: Q4 | |||
|150.395 | |||
|296.197 | |||
|610.635 | |||
|1140.595 | |||
|- | |||
!2022: Q1 | |||
|123.525 | |||
|285.320 | |||
|572.589 | |||
|996.099 | |||
|- | |||
!2022: Q2 | |||
|92.129 | |||
|268.337 | |||
|523.747 | |||
|825.409 | |||
|} | |||
== Wealth == | == Wealth == | ||