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Illustration: Megan Robinson/Axios

Economists expect the pace of economic growth to cool off now that government transfer payments like stimulus checks and emergency unemployment benefits are in the rearview mirror. But evidence suggests that the U.S. consumer is sitting on a lot of financial firepower that could be a key driver of growth in the quarters to come.

Why it matters: U.S. consumer spending is massive, representing about 70% of GDP.

What they’re saying: “Sustainability of US consumer spending as stimulus support wanes has been questioned by some investors,” Dubravko Lakos-Bujas, JPMorgan head of U.S. equity strategy, wrote in a research note Wednesday.

  • “We disagree with this negative narrative which underestimates the robustness of consumer balance sheets and more pointedly the savings war chest in place to support future spending.”

By the numbers: During much of the pandemic, personal incomes far outpaced spending. Incomes were boosted by fiscal stimulus while spending was depressed amid lockdowns.

  • When adjusting for how much consumers typically save, the excess savings accumulated during the pandemic amounts to around $2.4 trillion.
  • “These significant ‘excess’ savings should more than buffer headwinds that consumers may face from decreasing government stimulus payments and rising consumer prices,” Lakos-Bujas argued.

Yes, but: This estimate doesn’t account for how much money was used for paying down mortgages, paying off student loans, or even funding a brokerage account.

  • “I’m leery of thinking about this as though it were some giant piggy bank just waiting to fuel some bacchanalian spending spree once we get past the worst of the pandemic,” Wells Fargo senior economist Tim Quinlan tells Axios.

The bottom line: The average consumer has some combination of extra cash and lower debt.

Go deeper

Updated Oct 20, 2021 - World

Reports: Brazil leader to be accused of crimes against humanity over COVID

Brazilian President Jair Bolsonaro. Photo: Andressa Anholete/Bloomberg via Getty Images

A Brazilian Senate panel will recommend President Jair Bolsonaro be charged with "crimes against humanity," alleging his COVID-19 pandemic response led to hundreds of thousands of deaths, per the New York Times and the Washington Post.

The latest: The lawmakers initially said Bolsonaro should be charged with mass homicide and genocide, but they updated the report to replace these recommendations with the new charge, its lead author, Sen. Renan Calheiros, told the NYT.

Oct 19, 2021 - Health

Puerto Rico leads U.S. COVID vaccination rates

A mass vaccination event at the Puerto Rico Convention Center in San Juan, Puerto Rico, on March 31. Photo: Ricardo Arduengo/AFP via Getty Images

Puerto Rico has the highest percentage of people fully vaccinated against the coronavirus in the United States as of Oct. 19, according to data from the Centers for Disease Control and Prevention.

Why it matters: The island has managed to accomplish such feats amid frequent power outages, earthquakes and high dependence on imports of health technologies from outside the region.

Oct 19, 2021 - Health

Virginia governor has had long COVID for more than a year

Gov. Ralph Northam. Photo by Zach Gibson/Getty Images

Virginia Gov. Ralph Northam still has long COVID-19 symptoms more than a year after his initial infection, he said in an interview with the Virginian-Pilot.

Why it matters: The Democratic governor is one of millions of Americans suffering from symptoms of long COVID, which could have serious implications for employers and social programs if enough people can no longer work because of it, per Axios' Caitlin Owens.