--- title: The 'Savings Boom Is Over' as Americans Scramble to Cope With Inflation description: New data confirms that inflation is hitting Americans' budgets hard, sinking the personal saving rate to its lowest level since 2013. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ published: '2022-04-29T17:37:28.000Z' modified: '2024-02-18T13:30:15.000Z' section: Personal Finance tags: - News - Savings word_count: 530 canonical: https://money.com/savings-boom-over-inflation/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Downward Pointing Arrow Over Decreasing Stacks Of Cash](https://img.money.com/2022/04/News-Why-Ntional-Savings-Rate-Hit.jpg) Americans are saving at the lowest level in about a decade as increased prices for everything from gas to groceries continue to weigh heavily on their budgets. The U.S. Commerce Department released new numbers Friday showing that the personal saving rate has declined in the wake of [record-setting inflation](https://money.com/inflation-highest-since-1981-gas-prices/). In March 2022, the saving rate slid to 6.2%, down from 6.8% in February. “To afford higher priced goods \[sic\] consumers tapped into their meager savings, plunging the savings rate to its lowest level since Dec. 2013,” [tweeted](https://twitter.com/PeterSchiff/status/1520023271768563714) Peter Schiff, chief economist at the investment firm Euro Pacific Capital. The department defines the personal saving rate as the percentage people save of their disposable income after taxes. In its [report](https://www.bea.gov/news/blog/2022-04-29/personal-income-and-outlays-march-2022), the department said Americans’ incomes grew in March but did not keep up with the increased pace of their spending. This uptick was due in part to soaring gasoline and food expenses, largely mirroring the Labor Department's latest inflation report. In March, the inflation rate hit a [41-year high at 8.5%](https://money.com/inflation-highest-since-1981-gas-prices/), significantly more than the 2% rate the federal government typically prefers. Skyrocketing prices for [gas](https://money.com/free-gas-cards-tax-holidays-coming/), [groceries](https://money.com/save-money-on-groceries/) and [housing](https://money.com/new-home-sales-price-300k-disappearing/) were key contributors. Economists note that since spending is outpacing income gains, Americans are dipping into their [savings](https://money.com/how-big-rainy-day-savings-account/) to bridge the gap, thus pushing the saving rate down. March marked the third month in a row where the saving rate fell below the pre-pandemic average of 7.5%. For a while, the [plummeting saving rate](https://money.com/personal-savings-rate-pandemic/) was actually hailed as a sign of the U.S. economy returning to normal. At the beginning of the COVID-19 crisis, the saving rate was an astronomical 34%. As the economy screeched to a halt in summer and spring 2020, folks stayed indoors and all but stopped spending money on things like travel, restaurants and live entertainment. Millions of people also received several rounds of stimulus checks. The result was a massive increase to the personal saving rate, dwarfing even the 28% saving rate notched during World War II. At the height of the pandemic, Maria Solovieva, an economist and chartered financial analyst for TD Economics, estimated that Americans stockpiled [$2.7 trillion in “excess savings.”](https://economics.td.com/us-excess-savings) While it may sound counterintuitive, savings at such an elevated level can actually be a sign of an unhealthy economy — one in which consumers aren’t spending their money, businesses are shuttering and unemployment is rampant. The economy seems to be past this stage, but it’s now barreling through a period of record-setting inflation that’s forcing consumers to quickly burn through any excess cash they might have had. In short, the commerce report is confirmation that the “[savings boom is over](https://twitter.com/LizAnnSonders/status/1520021943621140483),” according to Liz Ann Sonders, chief investment strategist at financial services firm [Charles Schwab](https://money.com/charles-schwab-review/). Economists once celebrated as the saving rate dropped from above 30% and spending started to normalize. Now, they are split on whether the current saving rate is too low — and wondering if Americans have enough money stashed away to see them through this bout of inflation. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/savings-boom-over-inflation/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Personal Finance", "item": "https://money.com/personal-finance/" }, { "@type": "ListItem", "position": 3, "name": "Saving Money", "item": "https://money.com/saving-money/" }, { "@type": "ListItem", "position": 4, "name": "The 'Savings Boom Is Over' as Americans Scramble to Cope With Inflation" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/savings-boom-over-inflation/#webpage", "url": "https://money.com/savings-boom-over-inflation/", "name": "The 'Savings Boom Is Over' as Americans Scramble to Cope With Inflation", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-04-29T17:37:28.000Z", "mainEntity": { "@id": "https://money.com/savings-boom-over-inflation/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/savings-boom-over-inflation/#breadcrumb" }, "dateModified": "2024-02-18T13:30:15.000Z" }, { "@type": "NewsArticle", "headline": "The 'Savings Boom Is Over' as Americans Scramble to Cope With Inflation", "articleSection": "Personal Finance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/04/News-Why-Ntional-Savings-Rate-Hit.jpg", "width": 2880, "height": 1920, "caption": "News-Why-Ntional-Savings-Rate-Hit" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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