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26th June 2020
US personal saving rate rockets 4x as commercial banks deposits grow by 15% YTD
Data gathered by Buyshares.co.uk indicates that the US personal saving rate grew by at least four times between January and April 2020. According to the data, the rate stood at 33% as of April this year.
In January, the rate was 7.9% before slightly rising to 8.2%. By March, it hit 13.1% before the April high.
Before the 2020 spike, the highest rate was in December 2018 at 8.8% while the lowest rate was in December 2015 at 5.8%. Between June 2015 and December 2019, the rate remained fairly constant averaging at 7.2%.
From the research, the increased saving rate emerged in the middle of the coronavirus pandemic. According to the Buyshares.co.uk research report "Notably, the personal saving rate increased in the wake of the coronavirus pandemic that led to economic turmoil. About 40 million Americans lost their jobs as employers reacted to the economic hardship caused by COVID-19. In this case, it can be assumed that most people resorted to increasing their savings due to the unpredictable future that came with economic uncertainty."
Buyshares.co.uk's research also reviewed the US commercial banks' deposits. Between January and May this year, the rate grew by 15.22%. In January, the figure stood at $13.3tr while in May it was $15.32tr.
In March, the deposit increased to $13.85tr a percentage increase of 3.5%. By April, the growing amount in deposits kept growing to stand at $14.72tr.
From July 2015, the deposit has been undergoing an upward trajectory to grow by 42.58% by May this year.
During the period under review, the lowest deposits held by US commercial banks were recorded in December 2015 at $10.92tr
The Buyshares.co.uk research report notes that most Americans who lost their jobs as a result of the pandemic were depositing cheques from Federal unemployment benefits hence the spike.
Background at: https://buyshares.co.uk/us-personal-saving-rate-rockets-4x-as-commercial-banks-deposits-grow-by-15-ytd/