U.S. Savings Rate Falls to 2.6% as Debt Delinquencies Climb
Updated
Updated · American Action Forum · Jun 4
U.S. Savings Rate Falls to 2.6% as Debt Delinquencies Climb
3 articles · Updated · American Action Forum · Jun 4
Summary
U.S. consumers’ personal savings rate dropped to 2.6% in April from 5.5% a year earlier, the lowest since mid-2022 and a sign households are using cash reserves to sustain spending.
Inflation is now outpacing pay growth: average hourly earnings slowed to 3.7% in April, while monthly inflation exceeded wage gains in both March and April, squeezing budgets for food, gasoline and other essentials.
Debt stress is rising alongside that squeeze. The share of balances 90 days or more delinquent climbed to 3.36% in Q1 2026 from 1.41% at end-2022, with credit-card delinquencies at 13.12% and auto delinquencies at 5.60%.
Student loans show the sharpest deterioration, with delinquencies jumping above 10% in Q1 2026 from 0.53% in Q4 2024 after pandemic-era repayment relief and the on-ramp period expired.
Retirement accounts are increasingly being tapped as a backstop, with 19.2% of workers carrying outstanding 401(k) loans in Q1 2026, underscoring risks to the consumer sector that drives nearly 70% of the U.S. economy.