Savings Rate Hits Record High Amid Coronavirus Shutdown
May 29, 2020
Concerns about coronavirus have Americans saving more money than ever before. The personal savings rate, which tracks how much of Americans’ disposable income is being saved, reached a record high in April. The rate jumped to 33% for the month, up more than double from March’s 12.7%. This is the highest saving rate since data started being collected in the 1960s.
It is unclear how much the saving activity is being driven by fear, with people looking to build up their savings as much as possible in case of further layoffs. Some economists point to the lack of “opportunities,” as consumers have fewer avenues to spend money with restaurants and retail shops closed.
A swift economic recovery is going to require robust consumer spending, and economists worry that is Americans are not willing to open their wallets, it could make the downturn more severe and more prolonged.