Here we go again. Personal saving surged to $6.04 trillion in March. I'm just waiting now for Neel Kashkari to come out and explain that it's because we didn't go to movie theaters and restaurants. (Hey, Neel, restaurants are open and people are spending again. Check retail sales.)
Actually, Neel's an idiot. (Seems to be a requirement to work at the Fed.) The reason for the surge in personal savings was due to those stimulus checks and other fiscal support. It works.
By the way, one byproduct of this has been a precipitous slowdown in the growth of bank loans. Not surprising. When the government supplies cash to people their need for bank credit goes down. Poor banks. Fewer customers begging for their credit. That means less fees and interest payments.
Some restaurants were closed in March, because... pandemic.
ReplyDeleteSome. But MANY more were open as compared to April 2020.
ReplyDeleteAny idea how the $6T personal savings is distributed?
ReplyDeleteNow “the deficit!” will increase commensurate and the idiots still won’t be able to put it together...
ReplyDeleteDoes personal savings include personal debt, such as student debt?
ReplyDeletehttps://www.bea.gov/data/income-saving/personal-saving-rate
ReplyDeleteThe U.S. personal saving rate is personal saving as a percentage of disposable personal income. In other words, it's the percentage of people's incomes left after they pay taxes and spend money.
ReplyDeleteSo debts have to be deducted from this figure?
Spending money may include paying down personal debt.
To get “net worth” maybe...
ReplyDelete= Assets - Liabilities
Savings is on Asset side...
So if you have 100k savings and owe 50k student loan your worth is 50k ...