The US Personal Saving Rate: From the 2020 Spike to Today
The personal saving rate — the share of after-tax income that households don't spend — is one of the most revealing numbers in economics. It tells you how much financial cushion families are building, and it produced one of the most extraordinary readings on record in 2020, when locked-down, stimulus-flush Americans saved a third of their income. This guide charts the saving rate since 1960, explains the pandemic spike and the long-run downtrend, and shows why a low saving rate matters.
What is the personal saving rate?
The personal saving rate is the percentage of disposable (after-tax) income that households save rather than spend. A rate of 5% means people save five cents of every after-tax dollar. The bold line above is a 12-month average that smooths out the noisy monthly figure to reveal the trend. It's a key gauge of financial health: higher saving means more cushion against emergencies, but spending drives the economy, so the rate reflects a constant tension between caution and consumption.
The 2020 savings explosion
The towering spike in 2020 is unmistakable — the saving rate briefly soared above 30%, by far the highest on record. Two forces combined: lockdowns made it nearly impossible to spend on travel, dining, and entertainment, while government stimulus checks and enhanced unemployment benefits poured money into household accounts. The result was a mountain of "excess savings" that households spent down over the following years, helping fuel the post-pandemic spending boom — and inflation.
The long-run decline in saving
Step back from the 2020 spike and the bigger story is a decades-long decline. Americans saved around 10–12% of their income in the 1960s and 1970s, but the rate drifted steadily lower through the 1980s, 1990s, and 2000s, bottoming in the low single digits before the financial crisis. Cheaper credit, rising asset values that made saving feel less necessary, and a culture of consumption all played a part.
Why a low saving rate matters
A very low saving rate is a double-edged signal. It can mean households are confident and spending freely, which supports the economy — but it also means many families have little buffer against a job loss, medical bill, or recession. When the rate falls toward record lows, as it has recently, it suggests people are stretching their budgets, sometimes by leaning on credit cards. That's why economists watch the saving rate alongside debt and income to judge how resilient households really are.
Frequently asked questions
What is the personal saving rate?
The share of disposable (after-tax) income that households save rather than spend. A 5% rate means people save five cents of every after-tax dollar.
How high did the saving rate go during COVID?
It briefly soared above 30% in 2020 — by far the highest on record — as lockdowns curbed spending and stimulus boosted incomes.
Why has the saving rate declined over time?
From around 10–12% in the 1960s–70s, it drifted lower for decades amid easier credit, rising asset values, and a culture of consumption, reaching low single digits.
Is a low saving rate bad?
It can signal confident spending that supports the economy, but also that many households have little financial cushion against emergencies or recessions.
What were 'excess savings' after the pandemic?
The large pile of savings households built in 2020–21 from stimulus and reduced spending, which they later spent down — helping drive the post-pandemic boom and inflation.