ECONOMY

Americans are still better off, with more in the bank than before the pandemic

Bank account balances are 10 to 15 percent higher than they were in 2019, new data shows

By Abha Bhattarai
July 17, 2023 at 6:00 a.m. EDT

Despite a year when inflation pushed prices to new heights, Americans are still better off now than before the pandemic, with nearly 10 to 15 percent more in their bank accounts than in 2019, new checking and savings account data shows.

However, households are rapidly spending down that extra cash they’d socked away during the pandemic. Median account balances are at their lowest levels in roughly three years and have dropped as much as 41 percent from their peak in April 2021, when Americans were flush with government stimulus money and tax returns, according to a JPMorgan Chase Institute analysis of the bank accounts of 9 million Chase customers.

Taken together, the data helps explain the big mystery behind how the U.S. economy has managed to avoid a recession that many economists had forecast: Consumers, supported by a strong labor market, have been able to keep spending despite inflation and a sharp rise in borrowing costs.

But it also highlights why Americans remain tentative about their economic prospects, particularly as they face higher prices on food, housing and travel. Many have been working through their savings and say their bank account balances are on a downhill trajectory, with little prospect of building them back up to where they were a year or two ago.

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By Abha Bhattarai
Abha Bhattarai is the economics correspondent for The Washington Post. She previously covered retail for the publication. Twitter https://twitter.com/abhabhattarai