While strict travel restrictions under the new pneumonia epidemic have hit the retail market hard, global household savings have rapidly soared to US$5.4 trillion (HK$42.12 trillion), and consumer spending in the post-epidemic era seems to be gaining momentum, driven by progress in vaccination. The wealth of the “Generation X” born between 1965 and 1980 is increasing, in contrast to the single young people in first-tier cities on the mainland, where up to four percent are “moonlighters”.
According to the foreign media, citing the rating agency Moody’s report estimates that, by the beginning of the epidemic, as of the first quarter of this year, global households accumulated additional savings scale, equivalent to more than 6% of global gross domestic product (GDP). Not counting the $1.9 trillion stimulus package passed by the Biden administration, the excess savings of U.S. households have increased by more than $2 trillion.
Mark Zandi, chief economist at Moody’s, said that as countries gradually liberalize social restrictions, a large amount of suppressed demand and excessive savings will be released simultaneously, driving a surge in global consumer spending. It is estimated that if consumers spend a third of their extra savings, GDP will push up by more than 2 percentage points this year and next.
However, not all groups are immune to last year’s economic shock. According to the U.S. Federal Reserve, although the post-war baby boomers, that is, those born between 1946 and 1964 are still the main force of wealth in the United States, holding 52.7% of household net worth, much higher than the 33% they account for the number of households, but with the aging population, born between 1928 and 1945 Silent Generation (Silent Generation), and the post-war baby boomers accounted for the household With the aging of the population, the Silent Generation, born between 1928 and 1945, and the post-war baby boomers have both seen their share of net worth and household numbers decline, and now the “Generation X” has become the dominant generation as generations change. Last year, “Generation X” aged 40 to 55 accounted for 26.9% of overall household net worth, slightly higher than the 26.8% share of overall households.
In fact, the global consumer confidence index in the first quarter of this year has reached a new high since 2005, and consumer confidence around the world has risen significantly. Therefore, most institutions now expect the epidemic to be gradually controlled, consumption began to recover, but the development may not be as expected. Goldman Sachs economist Jan Hatzius estimates that nearly two-thirds of U.S. savings are held by the richest 40% of the population, and suggests that this may dampen the size of economic growth, as high-income households will continue to hold large amounts of excess savings rather than spend them.
Adam Slater, chief economist at the Oxford Economics Institute, also pointed out that if excess savings were held primarily by wealthier households, and if those savings were seen as increasing wealth rather than increasing income, then the market would expect a much lower level of additional spending.
However, mainland singles, especially the younger generation, are forming a huge new spending force. According to the analysis of the mainland official media, there are currently more than 200 million single people on the mainland, and about 40% of single youths in first-tier cities are “moonshiners”, i.e., “monthly salary”. The proportion of “moonshiners” has increased significantly, and among single young people in fourth- and fifth-tier cities, the proportion of “moonshiners” is as high as 76 percent.
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