The majority of Americans have burned through their excess savings piled up during the COVID-19 pandemic, and in the coming months, JPMorgan says it is likely that almost everyone will be worse off financially than they were in 2019.

In a Thursday note, the bank’s top stock strategist Marko Kolanovic said 80% of consumers, a group that accounts for nearly two-thirds of consumption, has already depleted any savings cushion they may have built during lockdowns.

“It is likely that only the top 1% of consumers by income will be better off than before the pandemic,” Kolanovic wrote, pointing to the growing signs of credit card and auto loan delinquencies, as well as Chapter 11 filings.

The chart below shows how, by June 2024, every income group except the top 1% is on pace to dip below their March 2020 levels of inflation-adjusted liquid assets, in the form of deposits and money market funds.

JPMorgan estimated previously that excess savings had peaked in August 2021 at $2.1 trillion, boosted by government stimulus checks. That’s since been whittled down to below $148 billion, per the firm’s calculations as of October.

“Consumers are facing tighter credit conditions and rising rates, wind-down of Covid-era stimulus and relief programs, declining excess savings and liquidity, and multiple years of above average inflation,” JPMorgan strategists wrote at the time.

As Bank of America wrote in a recent note, the plight of elder millennials is particularly difficult.

Older millennials — a demographic of Americans born in the 1980s that holds significant influence on the US economy — have had to navigate the 2008 financial crisis in addition to the pandemic during critical working years of their lives.

The two economic storms, as well as mounting childcare costs and sticky inflation, have made it difficult for the sizable cohort to own a house, save for retirement, and comfortably spend money within their means.

JPMorgan notes that, fortunately for now, there is little sign of systemic weakness in housing, though the market remains largely frozen amid high borrowing costs.

“There are no significant delinquencies in residential mortgages yet, as consumers locked in low interest rates,” Kolanovic said. “However, existing home sales have dropped near record lows, and ~$6.5 trillion of commercial real estate debt remains an overhang.”

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