Due to stimulus payments and a period of lower spending during the peak of the 2020 pandemic, Bank of America Corp BAK revealed that only 12% of its clients have account inflows that account for 85% or less of their outflows. If the economic slowdown remains gradual, Bank of America expects savings accounts to rise support consumers longer.

This is because savings buffers like stimulus payments and lockdowns allowed consumers to save more than normal during the pandemic.

What happened: Average household savings for those earning $50,000 or less saw the largest increase in deposits from 2020 to 2021, more than any other income group, according to the Bank of America report. During the pandemic, Gen Z saw deposits in their checking and savings accounts grow the most of any age group, while older and younger millennials were last.

According to the report, although the inflow-to-outflow rate has declined in 2022, it is still above 100% and is similar to pre-COVID-19 pandemic levels in September 2022.

As some media reports suggest, 60% of the population lives paycheck to paycheck as the pressures that accompany these low inflow rates. Bank of America reported that the proportion of people struggling to cover their expenses with incoming money appears small by media estimates.

With very little evidence that more people are living paycheck to paycheck, new data suggest accumulated deposits are now being drawn down, particularly for lower-income households, although savings buffers are a big help.

See also: The Fed expects moderate inflation – and has that to say about economic activity

Why it matters: Bank of America’s payroll proxy series, produced using identified Automated Clearing House (ACH), found payrolls on customer accounts increased 5.5% per household in the year to September. During the same period, total card spending per household increased by 4.4%.

As consumers are…