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.