Excess household savings in US swells to US$2.3 trillion

American consumers saved a lot of their big surge in incomes in March, pushing the savings rate to 27.6 percent, up from an already elevated 13.9 percent in February, AP reports.

Excess household saving now totals around US$2.3 trillion, a figure that has been climbing over the past year of lockdowns.

Analysts believe consumers will start spending this savings stockpile in coming months as increased vaccinations get them back into stores to shop, providing a strong boost to the overall economy this year.

“The strong consumer showing at the end of the first quarter sets the tone for a summer boom,” said Gregory Daco, chief economist at Oxford Economics. “As health conditions improve and the economy reopens, generous fiscal stimulus, rebounding employment and rising optimism will help unleash pent-up demand.”

Daco forecast that consumer spending will increase by more than 9 percent this year, the strongest performance since 1946.