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The epidemic has crippled millions of jobs in the United States, but it has had an unexpected effect in increasing the level of savings of Americans, especially the wealthy families who are destined to live at home and forced to give up travel and entertainment.
Families have drastically reduced their spending on spare time. At the same time, more modest families received government incentive checks, additional unemployment benefits, and were able to suspend monthly loan payments.
All this money has come to swell the economies of Americans, who are notorious for drowning in debt, lavish consumption and credit.
Thus, $ 1.8 trillion in excess savings have accumulated over the past 11 months, according to figures this week by Barclays Research and Oxford Economics.
“It is estimated that this stock will rise to 2.5 trillion by the summer,” Gregory Daco, chief economist at Oxford Economics, told AFP.
Americans’ savings rate rose, from 7 to 8% on average before the crisis, to a record high of 33% in April 2020, thanks to a giant subsidy plan of $ 2.200 billion for households and businesses, according to office data. Economic Analysis (BEA).
Then it eased again, before jumping again in January to 20.5%, thanks to the $ 600 stimulus checks included in the 900 billion plan that Congress approved at the end of December.
It may rise again in the spring as the Biden administration prepares to vote on a new stimulus package of around 1.9 trillion.
– Pay the bills –
If Americans generally had more savings, the inequalities were strong, and the wealthy households were able to save much more than those, the more modest, who were affected by job losses and whose government aid was mainly used to pay the daily bills.
Often wealthy families have managed to keep their jobs working remotely. In other words, their income level remained stable when their spending fell sharply, which led to an increase in savings.
“About four in ten Americans (42%) say they have spent less than usual since the start of the pandemic, and this is especially the case for people with high incomes,” highlights a survey of 10,334 adults representing the American population published Friday by the Pew Research Center The Independent.
About 53% of high-income Americans spend less, compared to 43% of middle-income earners and 34% of low-income people.
While Americans with comfortable incomes have not put their hands in their pockets for leisure and travel, people with lower incomes say they spend less because they are concerned about their personal finances.
The Pew Research Center study shows that savings were already very unequal before the crisis: “Many Americans found it difficult to save money.”
– Delightful consumption? –
In general, nearly half (47%) of low-income adults are unable to save, compared to 25% of middle-income adults and only 8% of high-income adults.
Savings are also more uneven according to society, with four in ten black adults (38%) saying they are generally unable to save, compared to 31% of Hispanics, 27% of whites and 19% of adults. Asia, according to the Pew Research Center.
The fundamental question remains whether these savings will boost consumption, which is the historic engine of US growth.
“Our view assumes a fairly rapid acceleration in household spending over the next year, and we clearly assume (that they) will benefit from the accumulated savings,” say Barclays economists.
They add that “the recovery in spending could be particularly strong if households experience impact + euphoria + (…) after a period of deprivation.”
Not sure, Gregory Daco answers. If he also anticipates a recovery in consumption, he notes that a portion of spending that has not been implemented for a year will not necessarily be compensated.
“Are we going to all the trips we wanted to take last year in addition to those planned trips once the pandemic ends? Are we going to travel in business class or first class on the pretext that we have more money aside?” Asked. “not necessarily”.
© 2021 AFP
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