For the last few decades the US personal saving rate hovered around 5% before slowly creeping up the last few years. But everything changed with the pandemic when the government gave most Americans big checks and they had nowhere to spend it. Saving shot up to nearly 25%, an all-time high since the data was collected (the spikes correspond to when the government sent checks). It is no wonder household balance sheets are in strong shape and people are reluctant to return to work. Though even as the economy recovers, saving is still elevated and hovering around 10%. Perhaps it is a new normal, or households are waiting on spending binge. But either way it is more evidence this is no normal recovery.
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