Americans have wiped out $3 trillion in savings in the past 3 years due to stimulus checks

Americans have erased $3 trillion in household savings in less than three years, according to statistics released by the Commerce Department. Between March 2020 and August 2021, families across America stacked up extra cash worth $2.1 trillion, mostly from stimulus checks and pandemic showdowns, with the pile now gone.By the second quarter of 2024, savings dropped to negative $900 billion as spending didn’t stop and debt kept rising. The savings rate is also tanking. It slipped from 4.1% in February 2025 to 3.9% in March. For reference, before the pandemic, people usually saved 5% to 6% of their income. That gap shows just how badly consumers are trying—and failing—to keep up.Americans wipe out $3 trillion in savings as spending outpaces growthMarch saw a sharp jump in consumer spending, rising 0.7% that month. People rushed to buy cars and trucks to dodge price hikes from import tariffs. In February, spending also ticked higher than previously thought, now sitting at 0.5%. That still wasn’t enough to change economists’ view that the economy is slowing.The GDP report for the first quarter backed that up. It showed the US economy contracted by 0.3% on an annualized basis. Imports ballooned, weighing down overall growth. Justin Anderson, a senior economist at Capital Metrics, said, “What we’re seeing is people spending just to stay afloat while the economy offers no real footing.”The Personal Consumption Expenditures (PCE) price index—a metric the Federal Reserve uses to track inflation—climbed 2.3% in the twelve months through March. That’s down from 2.7% in February. The core PCE, which leaves out food and energy, stayed flat month-over-month. Over the year, it rose 2.6%, after a 3.0% rise in February.President Donald Trump’s new tariff policies are expected to push prices even higher. Economists say this will likely trigger another inflation spike. Short-term inflation expectations among consumers just reached their highest levels since 1981.The post Americans have wiped out $3 trillion in savings in the past 3 years due to stimulus checks first appeared on Coinfea.