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- Americans are saving more, and tariffs may be one of the reasons, says a Bank of America Institute economist.
- David Michael Tinsley said it may be “people want a little bit more money in the bank.”
- The report added that a rise in retail spending may reflect businesses passing on tariff costs.
Americans have more money in the bank than before the pandemic — and it may have something to do with tariffs, a Bank of America economist told Business Insider.
David Michael Tinsley co-authored a report from the Bank of America Institute that found that, across all income brackets, median household savings have risen considerably compared with 2019 levels, particularly among those earning less than $100,000 a year.
Adjusted for inflation, the average monthly deposit for those earning less than $50,000 increased by about 58% between 2019 and 2025, around 52% for those earning between $51,000 and $100,000, and 37% for those earning more than $100,000.
One potential reason for people depositing more money, Tinsley said, is the impact of tariffs and economic uncertainty.
“People want a little bit more money in the bank,” he said.
Tinsley added that the numbers suggested the labor market and wage growth have been enough to support consumer spending, meaning consumers, “particularly at the lower and middle-end of the income distribution, haven’t really needed to dip into savings.”
The report said tariffs may have contributed to higher retail spending
The Bank of America Institute report also said tariffs may have contributed to the rise in retail spending in July. Total debit and credit card spending jumped 1.8% year-on-year, the highest rate of growth since January.
“It is possible some of the increase in spending was due to retailers passing through current or prospective tariff increases onto customers,” Tinsley and his coauthors said.
They added that the August 1 deadline for trade deals may have led consumers to “buy ahead” to avoid future price rises.
Adidas, Macy’s, Nike, Nintendo, Shein, Temu, and Target are among the major firms to have blamed price increases on tariffs.
Tinsley and his coauthor, Liz Everett Krisberg, also credited the boost in spending to online promotions, like Amazon’s Prime Day, which lasted longer this year than in 2024, and a rise in back-to-school spending.
