Consumers in Europe and the U.S. aren’t rushing to spend more than $2.7 trillion in savings socked away during the pandemic, dashing hopes for a consumption-fueled boost to economic growth on both sides of the Atlantic.

In the wake of lockdown easing during the northern hemisphere’s summer holiday season, excess savings in euro-area bank balances declined only marginally in August, and Italy still recorded an increase, according to calculations by Bloomberg Economics. In the U.S. there has also been no drawdown, the figures show. 

The absence of a consumption surge that had been anticipated by some economists may speak against the prospect of a lasting inflation shock feared by central banks. While higher balances could help households cope with skyrocketing heating bills, tepid demand might temper businesses’ ability to push through permanent price increases.  

“We’re not seeing any signs that the accumulated savings are coming back into the economy,” said Dario Perkins, managing director for global macro at TS Lombard in London. “Because people have these extra savings, they feel wealthy and they spend a bit more. A fraction of that money maybe gets spent, but it doesn’t come surging back.”

Bloomberg Economics calculates the total of excess savings built up since the crisis began at about $2.3 trillion in the U.S. and almost 400 billion euros ($464 billion) in the euro zone.  

Although the European Central Bank has long cautioned the stock of money accumulated during lockdowns will remain “largely unspent,” corporate executives and economists were betting on a growth fillip. 

What Bloomberg Economics Says
“Households in the euro area have accumulated huge savings during the pandemic as spending plunged and governments supported incomes,” said Maeva Cousin, a senior euro-area economist at Bloomberg. “While a consumption splurge looks unlikely for now, those savings will be a welcome buffer to some people as energy costs soar.”

CaixaBank SA Chief Executive Officer Gonzalo Gortazar said in May that he expected some bunkered funds to fuel consumer spending. The OECD anticipated European consumption would benefit from “lifting of containment measures and the concomitant fall in households saving, which finances sizable pent-up demand.”

The data throw cold water on the theory of a broad-based rally. 

European Commission sentiment gauges don’t indicate a boom in major purchases, and U.K. numbers also show consumers are cautious and unusually eager to save. In the U.S., the world’s biggest economy, consumer sentiment slumped during the summer. 

Anecdotally, some spending did increase. Jeweler Pandora A/S said its U.S. business got a fillip from pandemic stimulus checks, while U.K. retailer Next Plc noted in September that “the combined effect of pent-up demand for clothing, record savings ratios, and far fewer overseas holidays” boosted sales, though the effect was likely to diminish. 

Among reasons people have held on to their money are anxiety about resurgent outbreaks, the pace of the recovery and job prospects. Demographics and consumption patterns may also play a part. 

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