America’s excess savings remain high and the savings rate continues to decline


■ Real disposable income continues to rise, but the savings rate is still very low
■ Surplus savings in stocks are declining, but remains strong, supporting personal consumption

  According to the Job and labor transfer survey (JOLTS) in January, the number of recruitment cases was about 10.82 million, which reached the peak in March last year (about 12.02 million, although it gradually declined, it was still at a high level. In the case of strong demand for labor, the ratio of the labor force population (the sum of the employed population and the unemployed population) aged 25-54 who are called the middle-aged population to the working age population (aged 16 and above) is 82.7%. As of January, last August (82.8%) was close to the peak before the COVID-19 epidemic (January 2020, 83.1%) and remained high. The supply and demand situation in the labor market is still tense, and the pressure of wage rise is expected to continue.

  In January, the per capita disposable income of the United States (seasonally adjusted and converted at an annual rate) was US $58573 in nominal terms, up 2.0% month-over-month. It is 14.8% higher than that in February 2020 (US $51028) before the COVID-19 epidemic, showing a steady upward trend against the background of wage growth. Considering the price trend, the actual price was US $46536, up 1.4% month-over-month. From the second half of last year, it turned to an upward trend, and finally exceeded the level before the COVID-19 epidemic (as of February 2020, US $45948). It is evaluated to support the strong results of personal consumption since the beginning of this year.

  In this case, the savings rate (savings divided by disposable income) rose to 4.7% in January, but was significantly lower than the average level (7.6%) in 2015-2019. In terms of flow, it has restrained the speed of saving. In addition, in terms of stocks, savings accumulated after the COVID-19 crisis are gradually decreasing. According to the statistics on the flow of funds released by the Federal Reserve Board (FRB) on the 9th, the US household savings (the sum of savings/current account, savings/time deposit and MMF) totalled $17.6 trillion in the quarter from October to December last year. Although it has declined after reaching its peak in the quarter from January to March ($18.0 trillion), it has increased significantly since the quarter from October to December 2019 ($12.8 trillion). With the recovery of real disposable income and the reduction of people's savings through welfare, personal consumption seems unlikely to improve ahead of time. At the same time, assuming that the average trend from 2015 to 2019 continues to date, household savings are now estimated at $14.6 trillion. If the upward deviation trend is defined as excess savings, the amount in the quarter from October to December last year was $3.0 trillion, which has been declining since the peak in the quarter from January to March ($3.9 trillion). Looking ahead, it is necessary to carefully determine the decline rate of excess savings.