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Data: Bureau of Economic Analysis; Chart: Axios Visuals

Americans with limited options to spend during the pandemic saved more than usual. And while it’s unclear how this money will be spent, everyone agrees this is awesome for the economy.

Why it matters: Wells Fargo estimates $2.4 trillion in excess savings has been accumulated by consumers since the beginning of the pandemic. And consumer spending accounts for about 68% of GDP.

What they’re saying: "The savings are enormous," Wells Fargo’s Tim Quinlan tells Axios.

  • "This is equivalent to 15-20% of typical annual consumption and is an ample amount of dry powder consumers are able to tap as the economy re-opens," he adds.
  • How these savings will be deployed is "unpredictable," but they'll likely have a big impact on consumer spending "over the next couple years," Pantheon Macro’s Shepherdson said in a research note.

Yes, but: Quinlan notes that excess savings estimates don’t account for how much was used for things like paying off student loans, paying down a mortgage, or financing a brokerage account.

  • Commonwealth Financial Network’s Anu Gaggar tells Axios, "Lower income households could quickly run down their savings once additional stimulus payments are halted and rent and mortgage payment moratoriums are lifted."
  • "On the other hand, savings of higher income households could be stickier as they have lower marginal propensities to consume," she said.

But, but, but: "They still put households on better financial footing and therefore can support spending growth," Quinlan added.

  • Similarly, Shepherdson estimates that if households spent just 15% of these savings over the next two years, it would provide a 0.8% boost to GDP per year.

The big picture: The economy faces all sorts of shortages as growth heats up, which is boosting inflation. But the fact that consumers are still piling up savings speaks to how much demand continues to eclipse supply.

Go deeper

Des Moines' most successful tax protesters, listed

Nationwide’s building at 1200 Locust St. in Des Moines. Photo: Jason Clayworth/Axios

These Polk County properties received the largest property tax assessment reductions this year.

Of note: Tax savings were calculated using the county assessor's online tax estimating tool.

10 mins ago - Health

The drugs pushing prescription prices down for Medicare patients

Illustration: Annelise Capossela/Axios

Although net prices of brand-name drugs have increased significantly over the last decade, the savings produced by generics have actually driven average prescription prices down in Medicare's pharmacy benefit and Medicaid, according to a new analysis by the Congressional Budget Office.

Why it matters: The analysis reiterates that the generic market is largely working as intended.

Ben Geman, author of Generate
54 mins ago - Energy & Environment

Electric vehicle "tsunami" expected as new models hit market

Illustration: Aïda Amer/Axios

Bank of America analysts see 2022 as a "major year of commercialization" for the electric vehicle market amid a slew of new vehicle launches and many more on the horizon.

Driving the news: Over 85 new models are slated to launch in model years 2022-2025 (calendar 2021-2024), they said in a note that says a "tsunami" of new cars are coming.