As cities across America make plans to open up again, and vaccination number soar, there is another number that show a lot of promise. Retirement savings are ticking upward, according to an analysis of retirement assets by Fidelity for the first quarter of 2021. Average balances for more than 30 million 401(k) plans, 403(b) plans and individual retirement accounts have reached record levels.
The average IRA balance soared 31 percent to $130,000 compared to a year earlier; and 401(k) plans jumped 36 percent to $123,900 in the same time frame. 403(b) plans were up 42 percent to $107,300. These sizable year-over-year gains reflect the first-quarter 2020 market decline in the early days of the coronavirus pandemic.
Retirement savers are also taking advantage of the fact they can contribute to an IRA in 2021 on behalf of the previous year. Investors contributed to 1.3 million IRA accounts in the first quarter, a 52 percent increase from the first quarter of the previous year. More than 25 percent of all IRA contributions were made by investors under age 35, up from 23 percent at the same time last year.
This goes hand-in-hand with the Consumer Confidence Index rising sharply again in April, following a substantial gain in March. This indicates consumers’ short-term outlook for income, business, and labor market conditions is rising, and we’re in for a summer that most likely will be a bit “spendy”.
The other good news is that American businesses are hiring again. The number of Americans seeking unemployment benefits fell recently to 473,000, a new pandemic low and the latest evidence that fewer employers are cutting jobs as consumers ramp up spending and more businesses reopen.
The Labor Department recently reported that unemployment applications declined 34,000 from a revised 507,000 a week earlier. The number of weekly jobless claims — a rough measure of the pace of layoffs — has fallen significantly from a peak of 900,000 in January. Instead of cutting jobs, many employers are struggling to attract enough applicants for open positions. Again, this is a sign of companies preparing for an upcoming busy summer season.
More and more Americans are venturing out to shop, travel, dine out and congregate at entertainment venues. The reopening process has moved ahead so fast that many businesses aren’t yet able to staff up as quickly as they would like.
In April, employers added 266,000 jobs, far fewer than expected and an indicator that some businesses struggled to find enough workers. The surprisingly low gain raised concerns that businesses may find it hard to regain pre-pandemic employment levels.
But as Americans plan for a busy summer, there is a price tag and a big “Buyer beware” sign. Some shoppers may have noticed that their grocery bills are a bit higher than normal recently. Food prices rose 2.4 percent, while energy leaped by 25 percent and used cars and trucks climbed 21 percent.
The latest consumer price index revealed that consumer prices in April jumped 4.2 percent year over year — the largest increase since the Great Recession.
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