Why pent-up demand is disappointing

TSLombard with the note:

Households’ ‘excess’ savings haves urged globally in the midst of the pandemic, led by the US. American consumers’ surplus savings accumulatedsinceMarch last year ballooned to $2.4tn in June. But the boost toUSconsumption from households’ large savings buffers–whilst some of the largest globally–is likely to be short-lived and less than what headline numbers suggest.

US households’ surplus savings as a share of GDP and private consumption was the largest amongst OECD countries at the end of last year. Our calculations show that the gap has widened since then because of new rounds of stimulus checks and forced savings earlier in the year.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.