Spending Down Pandemic Savings Is an “Only-in-the-U.S.” Phenomenon
Posted: 11 Oct 2023
Date Written: October 11, 2023
Abstract
Household saving soared in the United States and other high-income economies during the pandemic, as consumers cut back on spending while government policies supported incomes. More recently, saving behavior has diverged, with the U.S. saving rate dropping below its pre-pandemic average while saving rates elsewhere have remained above their pre-pandemic averages. As a result, U.S. consumers have been spending down the “excess savings” built up during the pandemic while the excess savings abroad remain untapped. This divergent behavior helps explain why U.S. GDP has returned to its pre-pandemic trend path even as GDP levels in other high-income economies continue to run well below trend.
To view post: https://libertystreeteconomics.newyorkfed.org/2023/10/spending-down-pandemic-savings-is-an-only-in-the-u-s-phenomenon/
Keywords: savings, saving rate, consumer spending, consumption, disposable income, excess savings, growth, pandemic, post-pandemic
JEL Classification: E2, F00
Suggested Citation: Suggested Citation