Research Briefing | May 14, 2021

US | Here comes record-breaking consumer spending growth

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Spend, save, and pay down debt – that’s exactly what US consumers did in early 2021. This supported a 14ppts jump in the personal savings rate to 27.6% – its second-highest reading ever after April 2020 – and boosted households’ excess savings to $2.3tn. The strong US consumer showing at the end of Q1 sets the tone for a summer boom. 

What you will learn from this report:

  • We foresee real consumption growth at 9.6% this year – the strongest performance since 1946.
  • We expect US households will use about 13% of the $2.3tn in excess savings accumulated since the pandemic’s onset to smooth their outlays, supporting 5.1% consumer spending growth.
  • Should consumers spend 45% of their excess savings over the next 18 months, in line with the marginal propensity to spend out of income, real GDP could be 2.5% higher than in our baseline in 2022.
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