Federal Reserve Bank of San Francisco: “Households accumulated more liquid assets beginning in 2020 than would have been expected without the pandemic. These “extra” liquid assets have dissipated, but their evolution has differed significantly by income group. While middle- and lower-income households hold substantially less liquid wealth than implied by pre-pandemic projections, the level for higher-income households remains close to its pre-pandemic path. Over the same period, credit card delinquency rates initially dropped and, more recently, have steadily risen as pandemic-era liquid wealth was depleted, especially for middle- and lower-income households. Consumer spending has remained surprisingly resilient over the past two years in the face of higher interest rates. In an earlier study (Abdelrahman, Oliveira, and Shapiro 2024), we showed that the continued strength in consumer spending could be partially explained by the large amount of wealth that households built up following the onset of the pandemic recession. In this Economic Letter, we dig deeper to assess the link between consumer spending and wealth by income group. We track how liquid wealth—the asset class most easily converted to consumer spending—evolved during the post-pandemic period and how it exceeded expectations compared with a “no-pandemic” scenario. This measure of “pandemic-era wealth” quantifies the additional liquid assets accumulated by households due to pandemic-related changes in government income support and personal consumption decisions. We assess the evolution of pandemic-era liquid wealth across two income groups: high income and middle to low income. We find that households in both income groups accumulated and subsequently spent large amounts of liquid wealth following the onset of the pandemic recession. The rise and fall in household liquid wealth coincided with a fall and subsequent rise in credit card delinquency rates for both groups.”