The Economic Perspective: “Soaring Savings”

Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program looks at soaring savings.  Mike, it’s an understatement to say that we are living in a very unusual economy.  For the first time in our history many workers were ordered to stay home because of the coronavirus.  As a result, unemployment has jumped.  At the same time, the federal government has poured trillions of dollars into the economy.  Now I understand there’s another unusual piece to this puzzle.  What is it?

 

Mike: Summary Answer

  • Normally during bad economic times people are forced to draw down on their savings in order to meet their needs
  • But recently personal savings has soared
  • Result of two things
  • Federal stimulus payments and increased unemployment compensation
  • Plus, during the shutdowns in most states, limited places to spend
  • As economy reopens, the stash of savings sets the stage to support future consumer spending
  • If things go according to plan, this is exactly what will happen
  • I’m MW

 

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.