Many US consumers are starting 2021 with savings that are likely to help boost the economic recovery this year.
The latest Covid-19 federal aid package sent checks for $ 600 to many families who also received relief money last year, while the wealthiest families accumulated cash reserves by reducing their spending during the pandemic.
Americans saved $ 1.4 trillion in the first three quarters of 2020, or about twice as much as in the same period last year, according to analyzes by Berenberg Economics. That amount is equivalent to almost 10% of family spending in 2019, estimates Berenberg’s chief economist Holger Schmieding.
“In this unusual recession, governments have been exceptionally generous, people have been unable to spend the money and therefore have the money and the will to spend,” said Schmieding. As soon as business restrictions are lifted and people feel it is safe to leave again, “there will be a lot of spending – my guess is that the beaches will be crowded, the pubs will be crowded” and “in May and June in full swing,” he said he.
President Biden is calling for a new $ 1.9 trillion Covid-19 aid package to help Americans withstand the economic shock of the pandemic. His plan includes direct payments of $ 1,400 per person for most families and an unemployment insurance supplement of $ 400 per week through September.