During the early days of the COVID-19 pandemic, the U.S. savings rate hit a record 33%. Uncertainty pushed millions of Americans to put aside lots of cash and stop spending. 19 months later, little of that money has left the bank. 🏦🏦🏦
Though the pandemic appears to be waning, and that savings rate has fallen, people are still hoarding cash. According to Bloomberg, more than $2.3 trillion dollars socked away by Americans during the pandemic is still sitting in the bank.
The largest month-over-month increases were from Mar. 2020 to Apr. 2020, when the pandemic was gearing up. Those figures have continued to climb throughout 2021, most notably from Feb. 2021 to Mar. 2021.
Data from the U.S. government’s Bureau of Economic Analysis shows that the broader trend is unlikely to subside anytime soon. Both personal income and disposable personal income have seen paltry gains throughout 2021, even as the price of goods have increased because of inflation.
Economists have pointed out that many factors are influencing the decision not to splurge: rising prices are one of them, but so is the shortage of labor and the fear of more lockdowns or pandemic probs.
For people betting on a robust recovery, this looks pretty bearish. However, given the strong sentiment around the coming earnings season, investors might not have much to worry about. 🤔