Many US consumers start 2021 with savings likely to boost this year’s economic recovery.
The latest federal Covid-19 aid package sent $ 600 checks to many households that also received relief money last year, while more affluent households have amassed funds to curb 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 Berenberg Economics analysis. That amount equates to almost 10% of household spending in 2019, estimates Holger Schmieding, Berenberg’s chief economist.
“In this unusual recession, governments have been unusually generous, people have not been able to spend the money, and so they have the money and the will to spend,” Schmieding said. Once business restrictions are lifted and people feel it is safe to go out again, “there will be a lot of spending; I guess the beaches will be crowded, the pubs will be crowded ”and,“ in May and June it will be in full swing, ”he said.
President Biden calls for a new $ 1.9 trillion Covid-19 aid package to help Americans overcome the economic shock of the pandemic. His plan includes direct payments of $ 1,400 per person to most households and an unemployment insurance supplement of $ 400 a week through September.