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Americans Still Have Half A Trillion To Spend
Americans are still sitting on half a trillion in excess savings, a stash that could support consump
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I hope there are some savers out there with all this “excess “
Best I understand they’re taking satellite-level macro snapshots of a process better looked at from a cloud-level analysis of what individuals are doing on the ground; individuals who don’t even themselves know. I don’t know if we spent ours yet or not. I think we have, actually, what with the uninsured dental bills lately. And it’s easy to believe there’s still a half trillion out there, but I can’t imagine it’s now likely to be spent in any measurable sense. The signal-to-noise ratio was low for the first months (e.g., stimulus + tax credits = lowered child poverty rates), but with each passing month the measurements get less reliable.
‘considering his circumstances” – Brilliant!
My reaction is, if Americans had $2TR of excess savings, and spent $1.5TR, who is more likely to have spent more of their excess savings – the low income or the high income? I think low income. Then, if most of the remaining $0.5TR is in the bank accounts of the high income, does a slowing/recessionary economy make them more or less likely to spend it? I think less likely. Put another way, I think the “velocity” of that money may be low.
Many higher income people I know spent liberally in 2022, as we emerged from Covid. By now, they’ve taken their international trips, bought their toys, and had enough expensive meals for awhile, and are stepping back and assessing both sticker shock and the economic winds. Maybe I’m just projecting, but consumer spending has been pretty tepid.