Savings are Up
Americans have felt their lives completely disrupted over the last few months. Things have been turned upside-down, and nearly all the things we enjoyed doing before were suddenly unavailable to us. While this has influenced the economy as a whole both here in the U.S. and abroad, surprisingly, many folks found themselves saving more than ever before.
Being forced to stay in meant that for a great many people, they had far fewer opportunities to spend every month. If you were used to getting breakfast on the go and drinking coffee in a to-go cup every day, you know how expensive that can become over time. Add to that no dinners or lunches out, no Sunday-Funday brunches, no entertainment excursions or trips, no retail therapy (not counting, of course, ordering from market facilitators like Amazon).
And for many others, the uncertainty of the times meant that saving was a priority. Costs and luxuries were cut, and bargains were sought out. It’s no wonder that the personal savings rate hit a historic 33 percent in April – by far the highest since the U.S. Bureau of Economic Analysis started tracking how much people saved in the 1960s. Bank of America reported seeing higher savings than ever before in just a few short weeks. 30 to 40 percent more money was saved in customers' accounts than in the 12 weeks prior.
The COVID-19 effect on the U.S. financial system has many worried. 68 percent of Americans feel anxious about the impact of coronavirus on the financial markets, and this means they won’t be spending on as many things as before. Millions of Americans filed for unemployment since February 2020. Since the start of the government-mandated shutdown of the economy, 42.6 million jobless claims have been filed. However, while many thought they were going to stay unemployed, they found they had their jobs back as soon as the states started to open up again. Total nonfarm payrolls witnessed their worst monthly drop in April, and they also recorded the most significant one-month gain in history. Construction made up nearly half its April losses, and the leisure and hospitality sector added 1.37 million jobs back in May.
It isn’t all doom and gloom out there. The good news is that things are starting to look up. Businesses are opening again, and life is starting to take the shape of a new normal. Whatever tomorrow brings, we have to be prepared for it as best we can.
Saving is always a good thing to do. After this is all over, perhaps many folks will find themselves still saving more than before as they get used to making their own coffee or buying their own ingredients and making a fresh pasta rather than dining out at a local eatery. If you have been saving, then work out how best to consolidate that good work, and put it to good use.
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