Americans Now A Frugal Bunch As Savings Rate Surges To Unthinkable Heights In Consumption Plunge

Not surprisingly, household outlays in the US tumbled the most on record in April, a month that will live in infamy as perhaps the single most acute stretch for the world's largest economy in history. Personal spending plunged a jaw-dropping 13.6% for the month, worse than consensus expected, but not nearly as bad as the most dour projection from 65 economists, one of whom saw a 20% drop in the offing. Data out earlier this month showed retail sales collapsed 16.4% in April, nearly double the
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4 thoughts on “Americans Now A Frugal Bunch As Savings Rate Surges To Unthinkable Heights In Consumption Plunge

  1. As Richard Koo wrote this month, the pandemic will “have many irreversible impacts on the economy and society,” but none perhaps greater (from a macroeconomic perspective, anyway) than a possible change in attitudes towards savings.

    Who else is of the mind that that would be a good thing? It was just such a shift in mindset during the ’30 and first half of the ’40s that laid the foundation for the prosperity of the ’50s and ’60s (along with the arrival of a lot of babies).

  2. Just our economy becoming Japanese. When consumers are let out they will flock to stores just for a change of scenery. Not having cheap Chinese goods will be inflationary.
    There was not all that much to buy in the 30s and 40s. Electricity and roads laid the groundwork for the 40s and 50s although some thought of War as boosting the economy. Innovation from war helps, but cost in lives is high.
    Also war kills too many geniuses and innovators.

    1. The way I have heard it from people who were not wealthy and actually lived through the Depression, is that there were lots of goods available to buy, but no money to buy them with.

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