The savings cushion that many Americans built up during the COVID-19 pandemic is dwindling as people struggle with elevated decades-high inflation, with the overall savings rate dropping below pre-pandemic levels, to its lowest in almost 15 years.
In January 2020, the personal saving rate of American citizens was 9.1 percent, according to data from the Federal Reserve Bank of St. Louis. This spiked to 33.8 percent in April 2020 during the COVID-19 breakout. It declined to 13.8 percent by year-end, only to jump to 26.3 percent in March 2021. But since then, it has largely been a one-way decline with no major increase.
By December 2022, the personal saving rate was only at 3.4 percent, which is considerably lower than the 9.1 percent savings rate in January 2020. The last time the personal savings rate was lower than it was in April 2008….