US consumers step up savings, pay off more credit card debts in pandemic-times
by SOURAV D | VIEW 2535
Later last week, data from the US Federal Reserve had revealed the US consumers were packing more money into bank accounts and that they were downsizing credit card debts in a pandemic-era new normal, signalling how a large chuck of pandemic relief bill having been played out by the Americans as a Biden Administration has been pushing forward to pass another trillion-dollar pandemic stimulus bill by mid-March this year. On top of that, US Senate had passed an approximated $892 billion in pandemic relief bill later last year apart from a nearly $3 trillion spent by the Trump Administration, while questions were raised on an uneven distribution of the fiscal packages as a slew of small-scale businesses have still been bearing the heaviest brunt of the pandemic’s fiscal fallouts alongside travel and entertainment industry.
Commercial bank deposits climb to record high; credit card debts plunge
Aside from that, according to US Federal Reserve data released later last week, deposits in Commercial banks in the United States had soared to $97.9 billion over the week that ended on January 27, while on a quarterly basis, Americans had stuffed a record $16.3 trillion over the past fiscal quarter, a record deposit for any quarter ever.
Surprisingly, while the US Congress had passed a $2.9 trillion in pandemic stimulus bill in April last year, largely aimed at accelerating the pace of an ailing US economy that mostly depends on Consumer spending, the lifeblood of US economy accountable for roughly two-third of entire economic activities in the world’s No.
1 economy, Americans seemingly remained busy to ramp up their deposits, ignoring the fact that a lack of fresh capital inflows would darken up business landscapes further while ramping up inflation alongside prices of necessary goods.
In tandem, US Fed data had also revealed that the Americans had accumulated four years of savings in a pandemic-battered 2020 with deposits having shot up to $3 trillion compared to a $226.1 billion registered in December 31, 2019.
Aside from that, while US bank’s consumer loans dropped by a $3.5 billion to a two-year low of $1.51 trillion in the week that ended on January 27, credit card balances that used to account for roughly a half of non-mortgage consumer credits, stood at $736.6 billion in the latest week, their lowest level since 2016.