Stay at home orders, federal payouts, and recession fears pushed Americans to stockpile money.
Before the pandemic, the average portion of monthly income that American households were saving was at 7.5%, which skyrocketed to a record of 33.5% in April before going down to 19% in June. Savings are in large part due to the economy shut down that halted money spent on traveling, dining out, movies, and more. As well as the households that benefited from the stimulus checks of $1,200 for individuals and $2,400 for married couples. Economists believe that some Americans will not spend their cash hoard until the pandemic is over, as they are in fear of not knowing what the future holds.
Upper-middle-income Americans who continued to work and whose household income was low enough to qualify for the stimulus check likely benefited the most during the pandemic. With businesses running on reduced capacity and more time spent at home, many are spending their extra cash knocking out their honey-do list and focusing on home improvement. While many Americans are still worried, consumer spending is predicted to jump to a record 30% annual rate this quarter after plunging 34.6% the first three months of this year.