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Many U.S. consumers are starting 2021 with savings that could help fuel the economic recovery this year.
The latest federal Covid-19 aid program sent checks for $ 600 to many households that also received relief funds last year, while better-off households built up cash reserves by limiting spending during the pandemic.
Americans saved $ 1.4 trillion in the first three quarters of 2020, about twice as much as in the same period the previous year, according to analysis by Berenberg Economics. This amount is equivalent to almost 10% of household spending in 2019, estimates Berenberg chief economist Holger Schmieding.
“In this unusual recession, governments have been exceptionally generous, people have not been able to spend the money, and as a result, they have the money and the will to spend,” Schmieding said. . Once trade restrictions are lifted and people feel safe to go out again, “there will be a lot of spending – I guess the beaches will be crowded, pubs will be crowded” and “by May and June, it will be booming, ”he said.
President Biden calls for a new $ 1.9 trillion Covid-19 relief program to help Americans weather 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 per week until September.
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