Anyone that has tried to make a major purchase recently – a home, remodel, new vehicle, or electronic purchase – knows how tight supply is for everything after the pandemic. At the same time, investors are wringing their hands over rising inflation.
With that in mind, I was surprised to see this JP Morgan chart on the US personal savings rate. People are doing a lot more saving than spending right now …!
The chart goes back more than 50 years and we’ve never seen anything like this. I know the government has been sending out stimulus checks to folks whether they needed them or not, but I’m still surprised those $$$ ended up in savings.
Related: Our National Savings Dilemma
At the same time, spending (personal consumption) has bounced back nicely to it’s pretty-pandemic trend. It dropped off last year for sure, but is now back to where you would have thought it would be had there not been a pandemic …
It’s felt a lot like people are sitting home and spending MORE than ever before, but I guess that’s not the case. I would guess that if you looked by industry you would still see some wide variation. I’m thinking commercial real estate and the travel industry are still hurting a lot, while other categories are way up.
Still, the strong savings rate is a good sign that people haven’t just ‘blown’ their stimulus checks on short-term desires and maybe will use it for more productive long-term purchases, such is driving the housing market.
Have you productively redeployed your pandemic savings, or have you just banked it? We shifted our travel budget to our eye surgery and couldn’t be happier with the outcome.
Image Credit: Pixabay