In the second half of last year, as we continued to ponder the ever-impressive strength of the US consumer, we highlighted research on the subject of “excess” saving (which still seems a misnomer), noting JPM’s analysis that saw the consumer that had exhausted the various stimmy payments. Soon after, we discussed research from the San Francisco Fed that argued “a larger fraction of aggregate savings remains in the economy than previously expected”, thanks in part to “a comprehensive data revision”. The piece concluded that those savings would last until “the first half of 2024”. Well, while tomorrow may never truly arrive if free beer is involved (a medical concept?!), the future is now, and the SF Fed has bad news: “Pandemic Savings Are Gone”. As ever with economic research, this comes with a list of caveats, the jist of which are captured in the note accompanying the Fed’s chart below, i.e. savings are gone, relatively speaking.
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