Following a banner year for household finances in the U.S., Americans’ savings rates are in free fall, hitting lows not seen since the Great Recession.

The personal savings rate was 4.4% in April, according to data from the U.S. Bureau of Economic Analysis, the lowest rate recorded since September 2008. This isn’t just a reflection of the impact that inflation is having on households. Consumers are spending more on goods and services than they were before the coronavirus pandemic, even when adjusted for inflation.

The savings rate topped out at a record-breaking 33.8% in April 2020, at the height of the COVID-19 lockdowns—up from just over 8% in February 2020, right before the pandemic reached the U.S. It stayed elevated above 10% until June 2021, thanks in part to stimulus efforts and pandemic restrictions, and above 8% through the end of the year.

As a result, the financial well-being of Americans reached an all-time high in 2021, according to the Federal Reserve.

But this year has been dramatically different. Inflation has taken a huge bite out of households’ savings, and made it more difficult for families to put money away. In fact, a recent study found that adults are saving $243 less each month, on average. Other research has found that savings balances are falling in tandem: Americans have 15% less in non-retirement savings today than they did a year ago, on average, as they buy more goods and services than before, and pay more for them.

Dipping into savings to keep spending isn’t necessarily cause for alarm, says AnnElizabeth Konkel, economist at Indeed. It may even have positive effects for the labor market.

“Employers will want to meet consumer demand for goods and services, which in turn, means making sure they have enough workers,” says Konkel. “We’ve already seeing strong employer demand for workers, and this morning’s report suggests consumer spending will continue to support that demand.”

Still, inflation is a top concern for households. It was up 8.3% in April year over year, according to the U.S. Bureau of Labor Statistics. That’s down slightly from March—a good sign for consumers—but still well above the government’s 2% target. Savings could fall even more.

“The news is mixed on inflation—yes, inflation is finally slowing, but it’s a little early for high-fives,” Bill Adams, chief economist for Comerica, says in a release. “Rising prices will probably continue to be a big problem for the U.S. economy for at least the rest of the year.”

That said, earning more money can help lessen inflation’s sting. The government also reported that wage and salary income rose 0.6% in April with more Americans working and their pay rising.