In a note, Marko Kolanovic, a senior stock strategist at JPMorgan bank, said that most Americans have already spent the extra savings which they had accumulated during the Covid-19 pandemic.

Kolanovic found that among almost all US consumers, inflation-adjusted liquid assets like money market funds and deposits, will drop below 2019 levels by the middle of 2024.

He noted, “It is likely that only the top 1% of consumers by income will be better off than before the pandemic,” adding that this is beginning to show up in the recent increase in credit card and auto loan delinquencies, as well as a rapidly increasing number of bankruptcy protection filings.

In earlier calculations, JPMorgan found that the excess savings of Americans hit a record high in August of 2021 at $2.1 trillion. However that number had fallen to $148 billion by October of this year. At the time, the bank’s researchers explained that the trend arose due to “tighter credit conditions and rising rates, wind-down of Covid-era stimulus and relief programs,” as well as several years of higher than average inflation.

Kolanovic pointed out that so far the housing market has remained stable in spite of  higher borrowing costs, “as consumers locked in low interest rates.”

He added, “However, existing home sales have dropped near record lows, and roughly $6.5 trillion of commercial real estate debt remains an overhang.”

At the same time, US credit card debt had continued to surge, as the third quarter of 2023 was the eighth quarter in a row of year over year increases, according to data from the New York Federal Reserve Bank. Analysts have said that households are increasingly having difficulty managing their debt amid persistently high inflation and increasing interest rates, and that the trend could point to “real financial stress.”