New data from JPMorgan Asset Management published Monday shows estimated "excess savings" from U.S. households now stand at $900 billion, down from a peak of $2.1 trillion in early 2021 and roughly $1.9 trillion at the beginning of last year, YahooFinance.com reported. These savings have been drawn down as the personal savings rate has fallen sharply from historic highs seen during the pandemic. The latest data on personal income and outlays from the BEA, released on December 23, showed the personal savings rate stood at 2.4% in November, down from a record high of 33.6% in March 2020. Stimulus programs rolled out during the pandemic saw a surge in the household savings rate, which typically floated in a range between 7% and 9% of income in the years before the pandemic. Households saved more than 10% of their income in each month between March 2020 and May 2021, building a multi-trillion dollar stockpile of savings to run down in the future. As has been chronicled over the past two years, these accumulated savings for consumers have powered robust spending, even in the face of 40-year highs in inflation and a softening labor market. But with no new stimulus programs imminent and the economy showing some signs of feeling the impact of the Federal Reserve's aggressive rate hikes, the ability for U.S. consumers to power unexpected growth will likely to come to an end.
