Per Reuters

The San Francisco Feds have reported that compared to during the COVID-19 pandemic, US households still had some $500 billion in excess savings. Researchers Hamza Abdelrahman and Luiz Oliveria gave a statement in the latest Economic Letter of the Feds regarding households.

“Households on average, including those at the lower end of the distribution, continue to have considerably more liquid funds at their disposal compared with the pre-pandemic period,”

They also wrote that there could be three factors that could affect how long the excess funds could bolster spending. The first factor was if households started to save more compared to before, and the second factor was households changing their spending patterns.

The third factor was if households were able to find other income sources capable of replacing expired pandemic aid. During the peak, post-pandemic household excess savings reached a total of $2.1 trillion.

This spending was due to the US central bank's attempt to fight inflation with higher interest rates. From that $2.1 trillion, the amount of excess savings dropped to just $500 billion.

In February, it was reported that Gen Z retirement savings averaged just $33,000. However, this was because not all Gen Zers were still below working age.

These involved people born between 1997 to 2012, with some Gen Zers still short of 21 years old, considered the working age in some places. Baby Boomers had a median of $162,000 in retirement savings.

It was also reported how Gen Z workers placed an average higher compared to what was recommended by experts. This age group reportedly placed 20% of their annual salary into a 401(k), while experts only recommended 10% to 15% of one's income.

In March, emergency savings of less than half of US adults dropped from a year ago. During that time, a survey showed that 39% of participants saw a decline in emergency savings.

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Reuters