Bank balances higher post-pandemic
Americans have 10% to 15% more in the bank than they did pre-pandemic, says a new survey of millions of Chase customer accounts. But that may not last long: Households are quickly spending the extra money they’d saved during the pandemic. Median account balances are the lowest they’ve been in about three years, and down 41% from their April 2021 high. These stats may explain why the expected recession didn’t happen: because Americans were able to keep spending despite inflation.
- More good news: Pay raises have finally overtaken inflation, after two years of falling behind.
By Emma W. Thorne, Editor at LinkedIn News
Americans are flush…for now
Bank balances are higher than before the pandemic, but payments are coming due..
Parks and Recreation/NBC via Giphy
People across the US are likely belting out Lil Wayne when they check their bank balances these days. New data shows Americans have more cash sitting in the bank than they did before the pandemic.
- Americans have ~10%–15% more in their bank accounts than they did in 2019, according to a JPMorgan Chase analysis of 9 million Chase customers’ checking and savings accounts.
- Meanwhile, after lagging behind inflation for two years, wages are finally rising faster than prices. Last month, hourly wages were up 4%, while prices for consumer goods only climbed 3%.
We’re spending like we know we’ve got it: Though Americans have more funds than they did before they had an opinion on the best brand of hand sanitizer, median account balances have dipped more than 41% from their peak in April 2021, when people collected stimulus checks with nowhere to go spend them, the Chase analysis shows. And people still want to shop—consumer sentiment spiked to an almost two-year high this month.
It helps explain why the recession that Wall Street kept promising hasn’t materialized, according to the Washington Post (fingers crossed that trend continues).
The same can’t be said across the pond: According to the Wall Street Journal, Europeans are getting poorer. Wages have declined, and the fallout from Covid and the war in Ukraine continue to be felt.
But there are payments coming due
The biggest bill many are facing is the one for their student loans, and those auto-debits are scheduled to restart in October after the Supreme Court struck down the Biden Administration’s plan to forgive much of that debt.
Other programs that helped people save during the pandemic are also winding down, and there’s no telling what the potential impact of future interest rate increases on the economy or the job market will be.
Bottom line: Things are looking up right now, but maybe don’t blow your whole rainy day fund on jet skis and Barbie merch just yet.—AR
By: Abigail Rubenstein, Morning Brew