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MNI BRIEF: US Consumers May Cling to Record Savings- KC Fed

(MNI)

Optimism that U.S. consumers will soon tap record savings built up earlier this year may be misguided, a Kansas City Fed blog published Friday said.

"Recent increases in the personal savings rate have stirred hope that consumption will remain resilient," but "such optimism may be misplaced" due to persistent uncertainty, A. Lee Smith wrote. "As fiscal support lapses and forbearances expire, the strength of U.S. consumption is likely to be tested in the coming months."

While government support has been unprecedented, Smith wrote, labor market scarring "could just as easily have given consumers a lasting desire to increase" savings.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
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MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
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