Americans have wiped out $3 trillion in savings in the past 3 years, mostly from stimulus checks

Americans have burned through $3 trillion in household savings in less than three years, according to data from the Commerce Department.

Between March 2020 and August 2021, families across America stacked up around $2.1 trillion in extra cash—mostly from stimulus checks and pandemic slowdowns. That pile is now gone.

By the second quarter of 2024, savings dropped all the way down 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.

Spending outpaces growth as tariffs weigh down economy

March 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.