Americans added nearly $4 trillion to their savings during the Covid-19 pandemic, but most of the gains went to the wealthy, a new study has concluded.
Stimulus checks, rising stock markets and fewer spending choices led to a massive savings boom over the past year, with Americans saving about $3.7 trillion, according to a study from Oxford Economics.
Nevertheless, 70% of the gains went to the wealthiest 20% of Americans.
At the same time, “households in the bottom income quintile saved less than implied by their pre-pandemic behavior,” the study found.
While it’s not surprising that America’s savings, like income and wealthy, are concentrated at the top, the degree of the savings inequality was unexpected, according to Nancy Vanden Houten, the economist who co-authored the study with Gregory Daco.
“This latest data suggests that savings are even more skewed to the top than we previously thought,” Vanden Houten said.
Economists cite America’s savings boom as one reason consumer spending will remain strong in the coming months or even years, since households will be able to tap their savings for continued consumption.